Friday, 2 July 2010 at 17:15, Reuters, Singapore
Gold bounced from a 5-week low on Friday as weaker prices ignited buying by bargain hunters and jewellers, but investors were cautious ahead of the release of a U.S. employment report.
Investors shrugged off a small drop in ETF holdings, turning their attention to the June non-farm payrolls data which will set the tone for currencies and equities. Gold tumbled nearly 4 percent on Thursday as funds sold bullion to cover losses in other markets.
Spot gold hit a low of $1,196.00, its weakest since May 25, before rebounding to $1,206.45 per ounce by 0312 GMT, up $7.80 from New York's notional close as the Nikkei edged up and the euro steadied. Gold struck a record $1,264 last week.
"Unless we start to see the ETF holdings reduced markedly, then I would expect we'll have a bit of a rebound in the next few days," said Darren Heathcote, head of trading at Investec Australia in Sydney.
"If it starts to show significant falls, then it shows investment demand is actually starting to wane and we might be a little bit more concerned about further weakness, but at the moment I would say No."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings dropped to 1,319.219 tonnes by July 1 from a record of 1,320.436 tonnes on June 29 -- the first decline since early June.
US gold futures for August delivery steadied at $1,207.3 an ounce.
Dealers in Singapore noted bargain hunting as well as a surge in physical demand from Thailand, keeping premiums for gold bars steady at 40 to 60 US cents an ounce to the spot London prices.
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