LONDON: Gold steadied on Thursday to trade near its highest in more than a month as shares weakened on worries over the strength of the global economy, sending investors in search of assets perceived as safer, while a firm dollar kept prices in check.
Spot gold was down 0.1 percent at $1,239.45 an ounce by 1423 GMT. The metal rose to its highest since Sept. 11 at $1,249.30 in the previous session.
U.S. gold futures, which also hit a one-month high on Wednesday, were down $3.40 an ounce at $1,241.10.
The dollar was up 0.1 percent against a basket of main currencies, while European shares were down by over 1 percent, extending a drop on Wednesday of 3.2 percent, their biggest one-day slide in almost four years.
"Today we are not seeing a defined trend as we saw in the past few days, with risk aversion in the financial markets and gold recovering," Julius Baer analyst Carsten Menke said.
"So despite the share prices weakness and the concerns about growth that spread in the financial markets, people do not seem to be returning to the gold market en masse."
Flight from risk resulted in a massive rally in U.S. Treasury bonds, pushing the yield of the benchmark 10-year bond as low as 1.865 percent on Wednesday, its lowest since May 2013.
Returns from U.S. bonds are closely watched by the gold market, given that the metal pays no interest.
Data on Thursday showed the number of Americans filing new claims for jobless benefits fell to a 14-year low last week and that industrial output rose sharply in September.
But U.S. data has been patchy, with Wednesday's figures for September showing that producer prices dropped for the first time in more than a year and retail sales also fell.
The uneven nature of the numbers this week added to concerns voiced by some Federal Reserve policymakers about the broader economic outlook, which could delay a hike in interest rates.
In the gold market, meanwhile, concerns lingered over how much further prices could climb after the metal was unable to maintain all of its gains in the previous session.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund and a proxy for investor sentiment, fell 0.27 percent to 759.14 tonnes on Wednesday.
Physical demand, which usually provides a floor for prices, also seemed to have eased with the price gains. Premiums in top buyer China fell to between $1 and $2 an ounce from about $4 in the previous session.
PLATINUM, PALLADIUM FALL
Among other precious metals, spot platinum fell 1.2 percent to $1,238.49 an ounce, trading at parity with gold. Platinum's value is usually higher than that of gold.
"When the platinum:gold ratio trades at or below parity, Asian jewellery and investment demand for platinum typically rises rapidly," Natixis said in a note.
Spot palladium reached an eight-month low of $726.70 an ounce, down 4.3 percent.
"The weakness in palladium could be related to selling of physically backed products ... in particular positions being sold in one American product," Menke said.
In other news, the London Metal Exchange, owned by Hong Kong Exchanges and Clearing Ltd, will take charge of London's platinum and palladium pricing, also known as "fixes", from Dec. 1, replacing a teleconference with an electronic platform.
Silver was down 0.7 percent at $17.28 an ounce.
Comments
Comments are closed.