Spot gold had slipped 0.2 percent to $1,200.26 an ounce
(Photo: DC/File)
Singapore: Gold gave up some of its overnight gains on Tuesday as the dollar recovered from losses and oil prices weakened, dulling the metal's appeal as a hedge.
Fundamentals
- Spot gold had slipped 0.2 percent to $1,200.26 an ounce by 0036 GMT.
- Gold jumped more than 1 percent on Monday on a brief surge of late-day technical buying as it breached the $1,200-per-ounce level long after the U.S. dollar dropped from a more than five-year high.
- But the dollar recovered on Tuesday and was higher against a basket of major currencies.
- A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies and also decreases its appeal as an alternative investment.
- Softer oil prices have also hurt gold's appeal as a hedge against oil-led inflation. Oil slumped to fresh five-year lows on Monday.
- Investor sentiment has been largely bearish. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.25 percent to 719.12 tonnes on Monday.
- Cues for the day will also come from U.S. economic data that would indicate strength of the recovery and how soon the Federal Reserve could increase rates.
- Strong data and higher rates could provide a further boost to the dollar and hurt non-interest-bearing bullion.
- In gold mining news, Zijin Mining Group Co Ltd, China's largest listed gold producer, is buying nearly a 10 percent stake in Pretium Resources Inc, a small Canadian miner developing one of the highest grade gold finds in recent times.
Market News
- U.S. and European stocks fell on Monday after weak Chinese and Japanese data stoked worries about slowing global economic growth, while oil prices sank to five-year lows on expectations of oversupply into 2015.
( Source : reuters )
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