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Asian gold lower in afternoon in correction move

HONG KONG: Asian spot gold fell about $5 on Monday after stop-loss selling and physical selling in what traders said was a correction before the price resumed its upward trend.

Gold bullion was quoted at US$305.50/307.00 per ounce late on Monday compared to New York's previous close at US$310.20/312.20 on Friday."The market is basically long and the weak longs are bailing out. We have to see some correction first before gold can resume its upward trend," a trader said.

Another trader said gold may be oversold and was likely to test higher, possibly US$310, later on.

After falling on profit-taking in New York on Friday, gold opened lower in Asia but reached a high of US$310.00/311.50 before selling from Australia, including options-related selling, and local physical selling pushed the price down.

But sentiment was boosted last week after several major producers announced cutbacks in their hedging plans, which helped gold climb to a three-month high of US$319 a week ago.

Also boosting gold was the sharp rise in oil prices and renewed concern about inflation, a trader said.

"I am mildly bullish. I think we could see gold reach US$320 or US$330 within a month," he said. Gold's losses pushed silver lower, sparking stop-loss selling, traders said.

Spot silver was quoted at US$5.22/25 an ounce after closing in New York at US$5.27/30 on Friday.

In Tokyo palladium futures rose by their daily limit on sharp gains in New York on Friday, while platinum futures fell by their daily limit on profit-taking.

Local tael gold was quoted HK$30 down at HK$2,830.

The carry over charge at the Chinese Gold and Silver Exchange Society was -5.10, down from its previous fix at -2.5.-Reuters