Gold retreats after Mubarak resignation

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GMT - 3 Hours Gold retreats after Mubarak resignation

Post by εﺓз• » ιη∂αġι яσ¢χ « • on Thu Sep 15, 2011 3:59 pm

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LONDON: Gold retreated towards $1,360 an ounce on Friday from earlier three-week highs as news that Egyptian President Hosni Mubarak had resigned after weeks of protest took some heat out of risk aversion.

Mubarak handed over power to the army, ending three decades of autocratic rule, after escalating pressure from the military and protesters. Stock markets rose on the news, erasing earlier losses, while the dollar retreated from highs.

"The geopolitical risk and the incentive to buy gold on the back of that are probably reduced," said Hayden Atkins, an analyst at Macquarie. "Tension will still be simmering, but it won't be as big a news story for people to trade off."

Spot gold was bid at $1,362.10 an ounce at 1645 GMT against $1,362.90 late in New York on Thursday, having earlier risen as high as $1,368.16 an ounce. U.S. gold futures for April delivery were down 20 cents to $1,362.30.

Atkins said the protests' impact on gold had been largely peripheral as the metal remained trapped between slackening appetite for bullion as interest in other assets like stocks improved, and ongoing uncertainty over the economic outlook.

"It has provided gold with a little bit of direction day to day, but we still haven't moved very far since the pull-back at the start of the year," he said.

"The Middle East situation has made a difference at the margins, but people still aren't convinced over pushing (gold) one way or the other."

Gold fell 6 percent in January after a run of well-received U.S. data shifted investors' focus onto assets seen as higher risk like stocks, but its slide has been arrested this month.

"There was a significant questioning with respect to gold whether there was really much further appreciation to be had," Deutsche Bank analyst Daniel Brebner said. "There were potentially a number of big gold investors questioning whether they should trim their positions.

"The reason why these positions are in place is because there are some imbalances in the global economy.

"The reality is many of these investors realise it is going to take some time (to correct these), and maybe gold remains a good place to put part of your portfolio." (AFP)
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