Gold turns higher as $ surrenders gains

LONDON: Gold prices turned higher in Europe on Monday, rising back above $1,070 an ounce, as the dollar's retreat versus the euro boosted the metal's appeal as an alternative asset. Spot gold was at $1,072.40 an ounce at 1608 GMT versus $1,065.55 late in New York on Friday, having earlier touched a high of $1,073.50.
In the last session it slid to $1,043.75, its lowest since Nov. 2, as the euro fell on fears over the outlook for some eurozone economies. The single currency's recovery on Monday helped gold to rise, though analysts are still cautious.
"We are probably not out of the woods yet," said Saxo Bank senior manager Ole Hansen. "We are not ready to de-couple from the dollar, so we continue to keep an eye on that." US gold futures for April delivery on the COMEX division of the New York Mercantile Exchange rose $18.50 to $1,070.70 an ounce.
Gold's price drop prompted some fresh interest in the metal, however, with the world's biggest gold-backed exchange-traded fund, New York's SPDR Gold Trust, reporting its first inflow since December on Friday.
"There has been a bit of bargain hunting," said Credit Agricole analyst Robin Bhar. "We fell to nearly $1,040 on Friday, so that has seen a bit of trade interest and investor positioning emerging, which has given a boost to the market."
From a technical perspective, resistance near the $1,050 level held on Friday, preventing a move down towards the 200-day moving average near $1,020 an ounce. A breach of this area would lead to a sharper sell-off, analysts said.
Among other precious metals, silver was at $15.16 an ounce from $15.11 an ounce, platinum at $1,477.50 from $1,479.50 and palladium at $401.50 from $402.50.
"With the complex largely held hostage to EUR-USD movements, the near-term outlook looks shaky," said Morgan Stanley in note. "We do expect, however, platinum and palladium to continue to outperform." -Reuters