Gold slides on profit booking

February 02, 2009

Commodity Online
SINGAPORE : Gold prices slipped in Asian trade Monday after speculators booked profits from a rally to a near four-month high last week, but worries about the state of the global economy could still spur buying from investors.

Bullion was trading at $914.40 an ounce at 10.00 a.m Singapore time, down $12.60 from New York's notional close.

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The precious yellow metal recorded a 5.6 percent growth during January, its third consecutive monthly rise, partly driven by flight-to-quality buying after funds poured more money into bullion as an investment instead of other asset classes such as stocks and treasuries.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said it held a record 843.59 tones of gold on January 29, up 10.71 tones from January 27, as gold's recent rally attracted buying from funds and investors.

Speculative gold players in the non-commercial category boosted their net long positions to 141,114 lots on gold futures traded on Comex at January 27, up from 123,937 net long lots at January 20, Commodity Futures Trading Commission data showed.

But the physical sector remained slow, with jewelers staying on the sidelines because of high prices. India's gold futures hit an all-time high on Friday, tracking strong global markets and support from a weak rupee.

India is the world's largest gold consumer and the jewellery sector accounts for almost 70% of global bullion demand.

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