NEW YORK/LONDON: Gold slid below key support of $1,200 an ounce on Thursday, undermined by a firmer dollar following strong US economic data.
Spot gold lost 0.6 percent to $1,198.84 an ounce by 1:37 p.m. EDT (1737 GMT), while December US gold futures settled down $6.50, or 0.5 percent, at $1,205. Spot gold hit a six-day low of $1,195.95.
"Although we have quite a high conviction for higher prices in the medium and long term, we see a little bit of a challenge in the short term as long as the dollar remains strong," said analyst Carsten Menke at Julius Baer.
"You have to be cautious if you want to see higher gold prices, but we believe the bottom is here. From an investment point of view, it's really about averaging into the market, not just doing it all at once."
The dollar index gained against a basket of major currencies after US consumer spending increased in July, making gold more expensive for buyers using other currencies.
"Even with all of the geopolitical and trade tensions, we're still seeing good earnings by companies and that's supporting higher equity markets too, (pressuring gold)," said Chris Gaffney, president of world markets at TIAA Bank.
Spot gold has been trading within an $8 range over the past two sessions, with investors keenly watching the psychological $1,200 level after the metal broke below that mark and hit a 1-1/2 year low of $1,159.96 early this month.
The greenback's strength against the yuan was making bullion expensive for buyers in the world's biggest bullion consumer, China, on Thursday, traders said.
Gold investors also trimmed positions ahead of the long US holiday weekend, said Rob Haworth, senior investment strategist for US Bank Wealth Management.
"While a (relatively) stronger dollar and US economic growth are hurting the bullion's appeal, concerns that Turkey's financial crisis could spread may give the metal a reversal of fate," said Renisha Chainani, head of commodity and currency research at Monarch Networth Capital.
Spot silver fell 1.2 percent at $14.54 an ounce, earlier sliding to $14.47, a six-day low.
Platinum lost 0.7 percent at $790.49 per ounce, while palladium was unchanged at percent at $965 after hitting its highest since June 19 at $983.75.
Palladium's premium over platinum has increased to about $170 per ounce, the highest since March 2001. Commerzbank said in a note this reflects a global deficit in palladium and ample supply in platinum.
Comments
Comments are closed for this article.