SINGAPORE: Spot gold fell half a percent on Wednesday, pulling back from a rally of 2.6 percent in the previous session as disappointing US consumer data and poor economic sentiment in the euro zone buoyed safe-haven interest in bullion.
FUNDAMENTALS
Spot gold declined half a percent to $1,828.99 an ounce by 0020 GMT. US gold edged up 0.1 percent to $1,831.70 an ounce.
US consumer confidence plunged in August to its lowest since the 2007-2009 recession, after a bruising battle over the US budget slammed stock prices and pushed the nation to the brink of default.
Expectations that the US Federal Reserve may launch more stimulus for the faltering economy also support the sentiment in the gold market, as investors await a Fed meeting in September.
The euro zone's economic sentiment fell more than expected in August, just as Italy warned weak growth may endanger government plans to cut debt as a lukewarm bond auction threatened to drag the bloc's third-biggest economy back to the centre of the debt crisis.
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , edged up on the day to 1,232.314 tonnes by Aug. 30.
MARKET NEWS
US stocks rose for a third straight day on Tuesday in a volatile session, after minutes from the latest Federal Reserve meeting boosted expectations the US central bank will act again to stimulate the economy.
Renewed concerns about the euro zone sovereign debt crisis weighed on the euro in Asia on Wednesday, while the dollar also struggled after minutes of the US Federal Reserve's Aug. 9 meeting bolstered expectations for more stimulus.
Copyright Reuters, 2011
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