[miningmx.com] — Spot gold was on course for a third consecutive day of gains on Wednesday, supported by dollar weakness and physical buying, while platinum hit a 30-month high, buoyed by an improved economic outlook.
The euro currency rose to a one-month high against the dollar on Tuesday, after strong data out of Germany, the eurozone’s leading economy, lifted the economic outlook for the region. The dollar’s index against a basket of major currencies fell to a two-month low on Wednesday, as continued short-covering in the euro led to a broad fall in the dollar.
“It looks like gold is following the euro, which had a relatively strong run overnight,” said Darren Heathcote, head of trading at Investec Australia, adding that the dollar weakness was expected to continue supporting gold prices.
Active buying in Asia continued to buoy market sentiment, and gold is likely to trade in the range between $1 370 and $1 378 with a possibility of breaching the upside, he said.
Spot gold gained 0.4% to $1 373.3 an ounce by 03:13 GMT, gearing for its third straight day of gains.
US gold futures also rose by 0.4% to $1 373.
Spot gold is expected to end its current minor rebound by briefly touching a trendline resistance at $1 378 per ounce, as the major trend is still down, said Wang Tao, a Reuters market analyst.
Platinum at 30-month high
Spot platinum rose to $1 842.5 an ounce, its highest since July 2008, before easing to $1 839.99.
Upbeat economic data from the US and Europe in recent weeks suggests the global economy has gained a steadier footing, boding well for industrial metals as well as precious metals with industrial uses, including silver, platinum and palladium.
Three-month copper on the London Metal Exchange was slightly firmer at $9 720, just $34 below its record high hit earlier in the month.
Platinum is expected to surge to $1 950 per ounce over the next few weeks, should it stand firm above a pivotal resistance at $1 850, as the uptrend is steady and the bullish momentum has not dissipated. Retracement from the current level will be limited to $1 780, said Reuters’ Wang.
“PGM (platinum group metals) are well-bid today, lending support to gold,” said a Singapore-based trader.
