Singapore, Nov. 19: Gold prices steadied on Friday, holding onto gains from the previous session, as a cure is seen imminent for Ireland’s debt crisis, which helped boost the euro.
Ireland insisted on Thursday its low rate of corporation tax was “non-negotiable” as it discusses an aid package worth tens of billions of euros from European partners and the IMF for its shattered banks.
Spot gold edged up 0.3 per cent to $1,357.30 an ounce by 0711 GMT, on course for a weekly decline of 0.7 per cent weekly decline. US gold futures were trading at $1,357.2.
Investors are closely watching China’s monetary policy manoeuvres, after talk of an imminent rate hike caused a sell-off in commodities this week.
Another rate hike might increase downward pressure on commodities, but the impact is not likely to be profound as the anticipation has been building and partly priced in, analysts and traders said.
“I think a rate hike, if materialised over the weekend, is likely to exert a bit of volatility for commodities, including precious metals,” said Mr Yingxi Yu, an analyst at Barclays Capital.
“But fundamentally it doesn’t change our views that China will continue to grow at a robust pace. It doesn’t change our view that fundamental demand for commodities from China is not going to be severely affected by a
rate hike” he said.
China’s government has pledged to tame inflation, China’s consumer inflation reading hit a 25-month peak in October.