SINGAPORE: Gold prices slipped on Monday, weighed by modest risk aversion across commodities as concerns about the euro zone remained, though high oil prices cushioned the slide.
Bullion prices rallied more than 3 percent last week, as investors took relief after Greece secured a bailout and expectations of further monetary easing boosted gold's appeal as a good inflation hedge.
During a weekend meeting of Group of 20 finance ministers and central bankers, euro zone nations were told to put up more money to fight their debt crisis if they wants more help from the rest of the world.
"There is a softer turn across commodities after the G20 added to the risk anxiety," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
"Gold failed to break the $1,780 resistance last week and is likely to bounce between $1,760 and $1,780, but the eventual breakout will be towards the upside."
Spot gold lost 0.3 percent to $1,774.94 an ounce by 0340 GMT, after posting a 3.3-percent gain last week. It hit a five-month high of $1,787.11 last Thursday.
US gold was little changed at $1,777.
Technical analysis suggested that gold could rise towards $1,797 an ounce during the day, said Reuters market analyst Wang Tao.
Oil prices held near a 10-month high due to heightened worries about tensions over Iran's disputed nuclear programme. The geopolitical instability in the region could propel gold, traditionally a beneficiary of political and economic turmoils, to higher levels, analysts said.
The dollar weakness also helped underpin the sentiment in gold. The dollar index dropped to its lowest level in more than two months in the previous session.
"So long as the dollar remains weak, it is possible for gold to overtake $1,800 level in the short term," said an official at a Tokyo-based bullion house, but cautioned that gold's upside could be limited if solid evidence of an economic recovery emerged.
Scrap gold has flown into the Tokyo market since late last week, as yen-priced gold rallied to its highest since September and attracted selling interest, he added.
"Our retail prices rose 9 percent since the end of January. We've seen some liquidation by the general public, not only because of high gold prices but also a weak Japanese yen."
Eyes are on the European Central Bank this week, which is expected to inject nearly half a trillion euros to banks in the second allotment of the 3-year long-term refinancing operation (LTRO), to buy more time for Europe's politicians to find a solution to the euro zone debt crisis.
Speculators raised their bullish bets in gold to the highest level in five months during the week to Feb. 21, data from the US Commodity Futures Trading Commission showed.
Spot platinum, which rose to a five-month high at $1,731.5 and surged 5 percent last week, was little changed at $1,708.24.
South Africa's Impala Platinum had agreed to rehire thousands of miners sacked for an illegal strike that has halted production for more than a month at the world's biggest platinum mine, a leading union said on Saturday.
Comments
Comments are closed.