London - Arabstoday
Gold edged up yesterday, after touching a one-month high the day before, as concerns grew about the outlook for the US economy and the dollar weakened. Fears mounted that the US economy may be running out of steam as data showed companies had hired far fewer workers than expected in May and that output in the manufacturing sector hit its lowest level since 2009. Spot gold rose 0.1 per cent to $1,542.19 (Dh5,663) an ounce, having hit $1,550.14 on Wednesday, its highest since May 3. US gold was flat at $1,543.60, while euro-priced gold fell by more than 0.5 per cent on the day to €1,070.10 an ounce. Ratings agency Moody\'s cut its rating for Greek government debt further into junk territory, although the euro recovered on the back of optimism over a bailout deal for Athens. The dollar\'s fall to one-month lows against a basket of currencies has put a cushion under dollar-priced gold, although with the traditionally slower summer months approaching, analysts were cautious on the likelihood of gold returning to May\'s record high at $1,575.59 an ounce. Greece downgrade \"The downgrade of Greece wasn\'t a major factor for the precious metals, it is more of a currency play,\" said Quantitative Commodity Research strategist Peter Fertig. \"There is already some reflection that investors have returned to gold despite institutional investors having reduced their exposure,\" he said. \"You are in a period of seasonal weakness in gold. This does not exclude that we might see a record high over the over summer months, but these months are more a period of consolidation ahead of the festival seasons,\" he added. The gold price has risen by more than 5 per cent since the early-May sell-off across the commodities complex and the outflow of cash from the bullion market, as evidenced by declines in exchange-traded fund and futures holdings, has started to reverse. \"We\'ve recently seen a lot of worse-than-expected economic data,\" said Ong Yi Ling, an analyst at Phillip Futures, \"The economic uncertainty will keep gold underpinned.\" If gold effectively broke above a key resistance level at $1,550, it could rise above the record high of $1,575.79, set on May 2, Ong said. In ETF flows, gold holdings rose for the first time since May 26, up about 70,000 ounces to 64.542 million ounces, bringing the net change in holdings for the year to -0.73 per cent, from -0.66 per cent a week ago. Modest gain The platinum group metals rose modestly, having posted declines the day before after data showed US vehicle sales slowed far more than expected last month. The US car market, the world\'s second largest after China, is a key source of demand for palladium, which is used in catalytic converters in gasoline-powered vehicles.