Singapore: Gold retreated from sharp overnight gains early on Wednesday as the US dollar edged closer on a four-year high. Gold has struggled to hold rallies with the dollar close to multi-year highs and big outflows from bullion funds.
Fundamentals
Spot gold fell 0.2 percent to $1,161.60 an ounce, after gaining 1.2 per cent on Tuesday from a softer dollar. The metal has been unable to make a convincing break from a 4-1/2 year low of $1,131.85 reached last weak.
A stronger dollar and equities, along with optimism over the U.S. economic recovery, have hurt gold. The dollar index remained near a four-year peak of 88.190 hit last Friday, while the greenback was close to a seven-year high against the yen.
SPDR Gold Trust, the world's top gold-backed exchange-traded fund, said its holdings fell 0.12 per cent to 724.46 tonnes on Tuesday - a fresh six-year low. The bullion industry's annual conference agreed prices would nurse losses over the next year.
Lower prices have led South Africa's AngloGold Ashanti to plan staff cuts through voluntary severances. The London Bullion Market Association will stop producing its gold lending rates data from Jan. 30 as banks shy away from the risks of providing financial benchmarks, a source close to the situation said on Tuesday. Physical demand has shown signs of picking up as prices have somewhat stabilised, after last week's muted response to lower prices.
Market News
US stock prices were steady on Tuesday after the Dow and Standard & Poor's 500 hit record intraday highs for a fifth straight session, while the dollar rose against the yen on the prospect of a delay in a planned sales tax hike in Japan.
