Gold Trades Little Changed, Rising Crude Oil Provides Support

By Glenys Sim

Jan. 14 (Bloomberg) -- Gold traded little changed in Asia as rising crude oil prices and a pause in the dollar’s rally added to the appeal of the precious metal as an alternative investment. Platinum advanced.

Bullion, down 3.2 percent this week, edged higher after Saudi Arabia said it will extend its oil production cuts. Gold fell to a one-month low of $814.66 an ounce yesterday as the dollar neared a five-week high against the euro.

“Gold has crashed through key support around the $830-$835 area, and is now on track to test support towards the $750-$800 area,” Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, said in a report. The recent slide was “largely a function of the stronger U.S. dollar as well as a markedly weaker crude oil market.”

Bullion for immediate delivery traded little changed at $823.80 an ounce at 10:40 a.m. in Singapore, after gaining 0.1 percent yesterday. Gold for February delivery was 0.3 percent higher at $823.40 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.

The dollar fell from a five-week high against the euro on speculation a report today will show U.S. retail sales declined for a sixth month. The dollar weakened to $1.3244 versus the euro from $1.3182 late yesterday in New York, when it touched $1.3141, the strongest level since Dec. 11.

Platinum

Platinum for immediate delivery rose as much as 1.4 percent to $957 an ounce, as investors deemed the 5 percent decline in the past two days as excessive. The metal has fallen 40 percent in the past year on concern demand from carmakers may weaken further as their global sales plunge. Most platinum and palladium consumption is for catalytic converters to filter noxious gases from engine exhaust.

Ford Motor Co., the second-largest U.S. automaker, expects U.S. sales of cars and light trucks may fall as much as 9 percent this year from 2008, when they reached a 16-year low. PSA Peugeot Citroen, Europe’s second-biggest carmaker, reported sales dropped 8.7 percent last year.

Among other precious metals for immediate delivery, silver was little changed at $10.78 an ounce, and palladium rose 0.5 percent to $185 an ounce as of 10:40 a.m. in Singapore.

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