Gold rebounds on Iran missile test, off two-week low
Gold regained ground on Wednesday as speculators resurfaced on news that Iran had test-fired nine long- and medium-range missiles, lifting the metal's safe-haven appeal in times of uncertainty.
State media said Iran had test fired missiles, including one which it had previously said could travel as far as Israel and US bases in the region, at a time of increased tension between Iran and Israel over Tehran's disputed nuclear programme.
Gold hit a low of $915,60 an ounce before bouncing to $921,15/922,15 an ounce on the Iranian news, steady from 921,35/922,55 an ounce late in New York.
Gold fell as low as $912,50 an ounce on Tuesday, its lowest level since June 27, on weaker oil and a rebounding US dollar. Gold was well below a record high of $1 030,80 hit in March.
"It's not surprising that the market has taken the news as positive for gold. I think $910 to $912 are going to be support, on the top side we are looking at $925 as resistance," said Darren Heathcote of Investec Australia in Sydney.
"We still have an awful lot of uncertainty out there, which should help to underpin it for the time being," he said.
Tension is also high between Iran and the United States over Iran's nuclear programme, which Washington says is aimed at making an atomic bomb but Tehran says is for generating energy.
There has been media speculation of a possible US or Israeli military strike against Iran's nuclear facilities.
Gold has hit a lifetime high on record-high oil prices which raise the metal's appeal as a hedge against inflation and expectations of more interest rate cuts in the United States, which lift its appeal as an alternative investment.
The euro rose to $1,5713 the Iran news, which also pushed up oil prices by more than $1 a barrel.
While jewellery makers were on the sidelines, dealers said gains in bullion held by SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, to 658.99 tonnes, within sight of a record in March, showed investors' confidence in gold.
"From an investment perspective, there's still demand there," said Heatchote of Investec Australia.
Spot platinum firmed to $1 945,00 s/1 965,00 an ounce from $1 940,50/1 960,00 late in New York. It hit a two-month low of $1 936,50 on Tuesday on fears a slowing US economy could weaken demand from car makers.
Platinum was well below a record high of $2 290 hit in March on supply fears in main producer South Africa. Arbitrage buying from speculators in Tokyo futures pushed up cash prices but platinum struggled to sustain gains.
"After platinum fell below the $1 950 region, I think it could move lower, from a technical perspective. Gold and silver are definitely much better off," said a dealer in Singapore, who pegged support at $1 920 for platinum.
The most active platinum contract for June 2009 delivery on the Tokyo Commodity Exchange fell as low as 6 635 yen per gram, its lowest level since early June.
Spot palladium rose to $439,00/447,00 an ounce from $437,50/445,50 an ounce late in New York. Silver edged down to $17,79/17,84 an ounce from $17,82/17,88 late in New York.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $0,5 an ounce to $922,8.
