Singapore: Gold was stuck firmly below $1,300 an ounce on Wednesday and looked likely to extend losses to a fourth session as strong US economic data bolstered stock markets, dimming bullion's appeal as a safe haven.
Fundamentals
Spot gold had slipped about 70 cents to $1,294.60 an ounce after dropping 1.3 per cent in the last three sessions. US gold was steady at $1,296. US housing starts surged to an eight-month high in July, suggesting the nation's housing market recovery was back on track after stalling in the second half of last year.
Investors were eyeing minutes of the Federal Reserve's meeting in July for cues about the U.S. central bank's policy outlook. Fed Chair Janet Yellen's speech on Friday at a gathering of central bankers in Jackson Hole, Wyoming is eyed for when the Fed will increase interest rates.
Geopolitical tensions continued to support gold by keeping losses in check. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.5 tonnes to 799.19 tonnes on Tuesday. A gun battle broke out in the centre of the rebel-held Ukrainian city of Donetsk and residents ran for cover from artillery fire on Tuesday, taking a government military offensive into the heart of the retreating pro-Moscow separatist rebellion.
A ceasefire in the Gaza Strip collapsed on Tuesday, with Palestinian militants firing dozens of rockets at Israel and Israel launching air strikes. China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world's top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.
