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Gold puts up a fight as selloff slows near key US$1,200 level
[LONDON] Gold is showing resistance near US$1,200 an ounce, suggesting prices are for now finding a floor near a one-year low.
Since last week, the metal's declines have stalled as it gets closer to the price often touted as a key psychological level, trading no lower than US$1,204.58. While a stronger US dollar and US economic growth are hurting bullion's appeal, concerns that Turkey's financial crisis could spread may be preventing a further selloff.
"We are seeing the metal put up a fight against the stronger dollar, with the contagion risk attracting some demand," Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email.
There are other signs investors are losing faith. Holdings in exchange-traded funds are at a six-month low and money managers have never been so bearish.
Gold for immediate delivery slipped 0.1 per cent to US$1,211.24 an ounce at 3:27pm in New York, on course for a fifth straight weekly loss. On Comex in New York, futures for December delivery settled 0.1 per cent lower.
While the trend remains bearish, there's a possibility of a technical rebound to US$1,230 or US$1,235 in the coming weeks, according to Carlo Alberto De Casa, chief analyst at brokerage ActivTrades.
"It's probably still too early to pop the champagne as the gold bears are still in control and have yet to be challenged," Mr Hansen said.
In other precious metals, silver and platinum fell in the spot market while palladium gained.