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Asian gold unchanged in afternoon, seen rangebound

HONG KONG: Asian spot gold was little changed in quiet trading on Thursday, locked again within a range after earlier gains were undermined by falling oil prices.

Gold bullion was quoted at US$288.90/289.40 per ounce late on Thursday compared to New York's previous close at US$288.70/289.70 on Wednesday.

After a brief rise to US$292-294 this week, gold has returned to its recent narrow range of US$288-293, traders said.

"A lot of people expected gold to go higher, but then oil prices started to collapse and gold just followed suit," a Singapore trader said.

Oil prices fell on Wednesday after signals that OPEC hardliner Iran might agree to an increase in production.

Traders said gold was little affected by the dollar/yen rate, which returned to roughly the same level of 106.80 yen as it stood on Wednesday in spite of the Bank of Japan's efforts to weaken the yen.

Gold was receiving good support at US$287-288, and the outlook was for gold to remained range-bound in the short term, traders said.

Buying for physical demand was limited, but gold remained an attractive investment in light of recent volatility in world stock markets, a trader said.

"I am still bullish about gold. In the US$280s the price is pretty cheap, especially with stock markets so choppy," he said.

In Tokyo gold futures ended lower in line with a fall in New York overnight.

Spot silver was quoted at US$5.07/10 an ounce after closing in New York at US$5.08/10 on Wednesday.

Local tael gold was quoted HK$32 down at HK$2,678.

The carry over charge at the Chinese Gold and Silver Exchange Society was -1, up from its previous fix at -3.-Reuters