Gold Holds Over $900 in Asia as Crude Oil Gains, Dollar Steady

By Glenys Sim

Aug. 4 (Bloomberg) -- Gold traded little changed above $900 in Asia as the dollar held near a one-month high against the euro and yen, while crude oil prices rose, boosting demand for haven investments.

The precious metal tends to rise in tandem with oil as demand for an inflation hedge increases. Oil rose for a second day as a storm threatened U.S. output in the Gulf of Mexico and on geopolitical tension in then Middle East.

``Gold may be settling into a modest trading range for the near term,'' said James Steel, an analyst at HSBC Securities in New York. ``A combination of influences from the U.S. dollar, the credit markets and oil prices are likely to determine gold prices going forward.''

Bullion for immediate delivery rose as much as 0.4 percent to $914.40 an ounce, and traded at $910.02 at 7:57 a.m. in Singapore. Silver for immediate delivery gained 0.2 percent to $17.5125 an ounce at the same time.

Dollar-denominated gold tends to move in the opposite direction to the U.S. currency. The dollar traded near a one- month high against the euro and yen ahead of a Federal Reserve meeting tomorrow at which policy makers decide on interest rates.

The dollar was at $1.5570 against the euro, compared with $1.5564 at the end of last week. It traded at 107.58 yen from 107.71 yen.

Gold for June delivery on the Tokyo Commodity Exchange climbed 10 yen to 3,173 yen a gram ($917 an ounce) at 8:15 a.m. Singapore time.

Gold for December delivery on the Comex division of the New York Mercantile Exchange was little changed at $918.30 an ounce in after-hours electronic trading.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net