SINGAPORE Spot gold edged higher yesterday, on course for a fourth session of gains, supported by hopes of increased funding from the International Monetary Fund (IMF) to help tackle the eurozone debt crisis.
Deputy officials from the Group of 20 nations are set to discuss the plan at a meeting in Mexico yesterday and today. A boost in liquidity would benefit bullion as well as riskier assets.
The IMF funding talks are giving some support to metals, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. The market is also supported by fresh buying of some funds and physical demand.
But physical buying from China was slowing down, as the country is headed into a week-long Lunar New Year holiday next week, dealers said.
Cash gold prices had advanced 1,5% so far this week, riding on renewed optimism on global growth after upbeat data from China, the United States and Germany that boosted the euro, commodities and equities.
Spot gold inched up 0,3% to $1 664,40 an ounce, approaching a one-month high of $1 667,41 hit earlier in the week.
US gold gained 0,4% to $1 666.nTechnical analysis suggested that spot golds bearish target at $1 625,20 has been temporarily aborted, said Reuters market analyst Wang Tao.
The uncertainties around the eurozone debt crisis continue weighing on sentiment, as investors closely watch the progress in talks between Greece and its creditors on a debt swap deal.
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Failure of the talks would push Greece towards an unruly default, which could doom the euro and hobble the global economy.
Analysts expected gold prices to rise further as fundamentals for strong gold have not changed.
Golds key pillars of support remain intact, ranging from central bank buying to negative interest rates and rising longer-term inflationary pressures supporting investment demand, Barclays Capital said in a research note.
Platinum group metals retained strength on supply concerns in South Africa and improved sentiment on the global economy. Spot platinum rose to 6-week high of $1 534,50, and spot palladium hit a one-month high of $669,50.
