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Asian gold unchanged in two-way trade

HONG KONG: Asian spot gold was little changed on Wednesday from the previous close after currency-related selling was offset by physical buying.

Gold bullion was quoted at US$288.40/90 per ounce late on Wednesday compared to New York's previous close at US$288.55/289.25 on Tuesday.

"We saw some Japanese buying in the morning, followed by Australian selling and then more selling from Europe," a trader said.

A sharp rise in the dollar/yen rate in the early afternoon fuelled some Japanese gold selling, a trader said. "Gold lost about $1 after lunch after the dollar/yen came up strongly," he said.

Foreign exchange dealers said the dollar rose in Tokyo after the Bank of Japan intervened with the dollar trading at 104.80/90 yen. The dollar/yen rate was quoted at 105.90/95.

The losses in gold's price drew some physical buying in Singapore and locally, traders said.

The outlook was for gold to rise $1 or $2 but to stay in its recent range of US$288-293 in the days before the Bank of England auction on Tuesday.

The latest UK auction aims to sell another 25 tonnes of gold as part of a policy to cut reserves by more than half to 300 tonnes over several years.

In Tokyo gold futures closed lower as the mood turned cautious ahead of the UK auction.

The market showed little reaction to the Tokyo Commodity Exchange's announcement that it will maintain a price freeze on its April-December palladium futures contracts.

Spot silver was quoted at US$5.07/10 an ounce after closing in New York at US$5.09/11 on Tuesday.

Local tael gold was quoted HK$20 down at HK$2,675.

The carry over charge at the Chinese Gold and Silver Exchange Society was unchanged from its previous fix at -4.-Reuters