Jun 23, 2010 (Bloomberg) - Gold, little changed in Asian trading, may weaken on speculation that investors are taking advantage of the metal’s rally to a record to lock in gains.
Bullion for immediate delivery dropped as much as 0.2 percent to $1,237.95 an ounce before trading at $1,240.10 at 11:50 a.m. in Singapore. The metal climbed to an all-time high of $1,265.30 an ounce on June 21. August-delivery futures in New York were little changed at $1,240.90 an ounce.
"Gold is still looking well bid on its unique safe-haven status," said Peter Tse, head of precious metals with Bank of Nova Scotia in Hong Kong. "However, the market is heavily long and we could see some profit-taking," he said, referring to bets that prices will rise.
Investors have amassed gold as the sovereign-debt crisis in Europe fanned demand for safer assets, prompting a 13 percent gain in prices this year. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, increased to a record 1,313.13 tons yesterday, according to figures on the company’s website.
The euro fell to a one-week low against the yen on concern European banks will incur rising loan losses from the region’s debt crisis, hampering the worldwide economic recovery.
"There may be some consolidation in gold prices," said Ong Yi Ling, an investment analyst with Phillip Futures Pte Ltd. in Singapore. "Gold is likely to be range-bound between $1,230 and $1,245. Nevertheless, persistent worries over the economic recovery of U.S. and Europe will lend strength to gold."
Still, gold may find it difficult to break through the $1,250 level for now and a drop below $1,230 may spur a sell- off, Anantharajan Paulpandian, technical analyst with MF Global Singapore Pte Ltd., wrote in a report.
Silver for immediate delivery was little changed at $18.8038 an ounce, palladium fell 0.1 percent to $483.35 an ounce and platinum shed 0.4 percent to $1,577.25 an ounce.