Singapore: Gold was trading close to its lowest in nearly four weeks on Tuesday, struggling to get past sharp overnight losses from profit-taking and hurt by stronger global equities that dented its safe-haven appeal.
Fundamentals
Spot gold was little changed at $1,307.56 an ounce, after sliding 2.3 per cent on Monday - the metal's biggest one-day drop since December. Fading fears over Portugal's banking sector and higher equities dented the safe-haven appeal for gold, pushing prices to their lowest since June 19. Heavy selling was triggered on stop-loss orders after prices broke below $1,330 an ounce.
Gold had climbed to a near four-month high of $1,345 last week as troubles at Portugal's top bank rekindled fears over another euro zone banking crisis. Bullion investors were eyeing developments in the Middle East and Ukraine for any escalation in violence that would create fresh safe-haven demand for gold.
Egypt has proposed a ceasefire between Israel and Palestinian militants in Gaza that would start on Tuesday, ending a week of cross-border warfare, and be followed by talks to prevent further hostilities.
Ukraine stated that Moscow was once more building up its troops on the joint border and accused Russian army officers of fighting alongside separatists in the east of the country. Meanwhile, SPDR Gold Trust - the world's largest gold-backed exchange-traded fund - said its holdings rose 8.68 tonnes to 808.73 tonnes on Monday.
