* Coming Up: U.S. Federal budget for July; 1800 GMT
By Lewa Pardomuan
SINGAPORE, Aug 10 (Reuters) - Gold inched down on Friday, taking its cut from Asian equity markets that had paused for breath after recent rallies, but it remained on track for a second weekly gain in three weeks, bolstered by hopes China could move to stimulate growth.
Gold had fallen 0.24 percent to $1,613.26 an ounce by 0647 GMT, having risen slightly on Thursday on hopes for stimulus measures by China after data showed factory activity had slowed unexpectedly.
Uncertainty over whether the U.S. Federal Reserve and European Central Bank will also take steps to boost their economies has deterred a stronger move in gold prices, and bullion remains way below last September's record high around $1,920 an ounce.
"We have previously noted our concern that gold prices seem reluctant to move out from their $20 comfort zone centred on $1,610 and the risk is of a retest of the lower end," said Nick Trevethan, senior commodities strategist at ANZ in Singapore.
"Otherwise, bullion looks set to mark time until the Federal Reserve symposium at the end of the month, and to see how the ECB intends to address the crisis in Europe."
"We still maintain our mildly positive bias for gold, with a test of the resistance band between around $1,618 to $1,630 possible, but in our view unlikely to succeed," he added.
Spot gold could revisit its Aug. 8, low of $1,602.94 per ounce as it has not broken resistance at $1,618, said Reuters analyst Wang Tao.
Asian shares snapped a four-day rally on Friday and extended losses after China's July trade data fell far short of expectations, but downbeat Chinese economic data has kept hopes alive that Beijing will do more to bolster growth.
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong said investors were looking for China to reduce banks' reserve requirements and pump more money into the market and there were other hopes for another round of quantitative easing by the Fed if U.S. data is weak.
Markets have been pinning their hopes on the possibility the ECB will start buying sovereign bonds to lower borrowing costs for Spain, and the Fed will expand its monetary easing, despite suggestions from authorities that no steps were likely before September.
"The market is a bit mixed," Leung said. "On the physical side, there are people buying a small amount of gold, but on other hand, some are taking profits."
U.S. gold for December eased 0.27 percent to $1,615.90 an ounce in thin trade.
Holdings of the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust SLV and that of the largest gold-backed ETF, New York's SPDR Gold Trust GLD, remained unchanged from Wednesday to Thursday.
Source:
Posts
0 comments