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Gold dips from near 7-month high Price of gold decreased Monday after gaining 10 per cent in five weeks, but stimulus measures from central banks is expected to continue supporting prices
Gold pulled back from a near seven-month high on Monday, but a recent spate of stimulus measures from central banks that has buoyed bullion is expected to continue supporting prices. Gold has gained more than 10 per cent over the last five weeks, its biggest such gain since September 2011, after the Federal Reserve and European Central Bank each announced fresh monetary easing measures to support their economies. Easy monetary policies drive investors to seek a hedge against higher inflation risk caused by rampant cash printing by central banks. A low interest rate environment also helps non-yielding gold attract investors. "I'm not worried at all about gold," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. "Despite the short-term retracement, gold is still a buy, and is still attractive. The $1,950 level is still a guidance." Spot gold fell as much as 0.9 per cent to $1,757.14 an ounce, after hitting $1,787.20 hit in the previous session, its highest since 20 February. Gold rose 0.6 per cent last week, its fifth straight week of gains. It stood at $1,759.59 by 0651 GMT (01:51 ET). US gold lost 0.9 per cent to $1,762.40. A stronger dollar .DXY also weighed on commodities priced in the greenback, making them less attractive to buyers holding other currencies. "I wouldn't be surprised to see gold pull back to the $1,750 area but dips will continue to be bought," a Singapore-based trader said. Spot platinum dropped as much as 2 per cent to $1,603.5 an ounce and spot silver fell 1.9 per cent to an intra-day low of $33.78. Equities and other commodities also weakened, as investors returned to worrying about the global economic prospects with a string of data due this week. Investors piled into gold after the U.S. Federal Reserve announced a fresh round of quantitative easing earlier this month. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, had climbed to 1,317.762 tonnes by September 21, its highest level since July 2010. In the US gold futures and options market, speculators raised their net long positions to 178,426 contracts in the week ended September 18, the highest level in nearly seven months. Net length in platinum jumped to a historical high of 27,643 lots. Among other news, in top platinum supplier South Africa, authorities have issued an arrest warrant for ANC renegade Julius Malema, a key backer of wildcat strikes that have spread from platinum to gold producers in recent weeks. http://english.ahram.org.eg/News/53656.aspx
