Gold
prices traded steady on Friday, as investors watched the progress of a
crucial European Union summit with dwindling confidence that it would
produce a cure for the two-year-old debt crisis.
The European Union failed to secure backing from all 27 countries to
change the EU treaty at a summit on Friday, meaning any deal will now
likely involve the 17 euro zone countries plus any others that want to
join, three EU diplomats said.
The summit is unlikely to produce a definitive plan to solve the euro
zone debt crisis, but the single-currency bloc will survive in its
current form, a slim majority of economists polled by Reuters said
earlier.
"A day or two is not enough to solve the problem in Europe," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong. "If we don't see any concrete outcome from the summit, gold is likely to test $1,700, and $1,680 after that."
The overnight price drop to near $1,700 failed to inspire much physical buying interest, as most market participants are cautiously watching the euro zone events play out in a market that lacks clear direction.
"Prices are likely to range between $1,700 to $1,750 towards the end of the year, and market activities are thinning ahead of holidays."
Spot gold edged up 0.3% to $1,712.39 an ounce by 0310 GMT, on course for a fall of nearly 2% on the week, its third week of losses in the past four.
US gold inched up 0.2% to $1,717.
China's annual inflation rate in November tumbled to its lowest level in more than a year, fuelling hopes for more monetary easing, which could underpin sentiment in industrial metals as well as precious metals with industrial exposure, such as silver, platinum and palladium.
"It's relatively bullish news for silver," said a Shanghai-based trader, "We don't know if any more easing policy would be announced by the end of the year, but at least we are sure there won't be any more tightening."
"Fabricators are facing a very tough environment, especially on the credit front. A recovery in liquidity will certainly be welcomed."
But the uncertainty around the euro zone's fate and its impact on the global economy remain the overarching concern in the market.
Spot silver edged up 0.2% to $31.70, but still on course for a weekly decline of 2.6%.
On Saturday, China is due to release the preliminary November trade data, which is expected to show a pickup in commodities imports. However, the global economic uncertainty and slower domestic growth could dampen demand in the months ahead.
Spot palladium lost 0.9% to $665.22, but headed for a 4-percent rise on the week, its second week of gains in a row.
"A day or two is not enough to solve the problem in Europe," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong. "If we don't see any concrete outcome from the summit, gold is likely to test $1,700, and $1,680 after that."
The overnight price drop to near $1,700 failed to inspire much physical buying interest, as most market participants are cautiously watching the euro zone events play out in a market that lacks clear direction.
"Prices are likely to range between $1,700 to $1,750 towards the end of the year, and market activities are thinning ahead of holidays."
Spot gold edged up 0.3% to $1,712.39 an ounce by 0310 GMT, on course for a fall of nearly 2% on the week, its third week of losses in the past four.
US gold inched up 0.2% to $1,717.
China's annual inflation rate in November tumbled to its lowest level in more than a year, fuelling hopes for more monetary easing, which could underpin sentiment in industrial metals as well as precious metals with industrial exposure, such as silver, platinum and palladium.
"It's relatively bullish news for silver," said a Shanghai-based trader, "We don't know if any more easing policy would be announced by the end of the year, but at least we are sure there won't be any more tightening."
"Fabricators are facing a very tough environment, especially on the credit front. A recovery in liquidity will certainly be welcomed."
But the uncertainty around the euro zone's fate and its impact on the global economy remain the overarching concern in the market.
Spot silver edged up 0.2% to $31.70, but still on course for a weekly decline of 2.6%.
On Saturday, China is due to release the preliminary November trade data, which is expected to show a pickup in commodities imports. However, the global economic uncertainty and slower domestic growth could dampen demand in the months ahead.
Spot palladium lost 0.9% to $665.22, but headed for a 4-percent rise on the week, its second week of gains in a row.
| Reuters / Singapore | |||||||
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