Gold slightly up in Asian trade

February 25, 2009

Commodity Online
SINGAPORE : Gold prices advanced marginally to $963.10 an ounce in Asian trade Wednesday up 0.07% from New York's notional close on Tuesday.

However, traders said sentiment had turned slightly softer after the market's failure to breach an 11-month high above $1000 an ounce hit last week.

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On Tuesday, gold's failure to revisit last week's high above $1000 triggered a bout of profit taking by short-term investors.

Gold's losses accelerated after Federal Reserve Chairman Ben Bernanke said inflation pressures had receded dramatically as oil and commodity prices had fallen and slack had built up in the economy, denting gold's appeal as an inflation hedge.

Bullion was also pressured after US stocks rallied 4% following Bernanke's comments that signaled that the nationalization of major banks was not at hand, showing that investors were shifting funds into riskier assets.

Indicating that investor interest may have paused for the time being, holdings of SPDR, the world's largest gold-backed exchange traded fund, remained unchanged at a record high 1028.98 tones on February 24, a level it first touched on February 19.

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