Global gold prices ease as investors look to riskier assets
Gold prices hit their lowest in over a week, extending losses from the previous session as investor appetite for riskier assets such as equities begins to pick up
Gold prices hit their lowest in over a week on Tuesday, extending losses from the previous session as investor appetite for riskier assets such as equities began to pick up.
Asian shares marked a 10-year peak early in the day and the dollar held gains, with investors breathing a sigh of relief as fears over North Korea eased slightly and the worst-case scenario from Hurricane Irma looked to have been avoided.
Spot gold had edged 0.2% lower to $1,324.80 an ounce by 9am, after earlier touching its lowest since 1 September. The metal lost 1.4% in the previous session, its biggest one-day percentage decline since early July. US gold futures for December delivery were down 0.5% at $1,329.40 an ounce.
“Relief selling in gold was seen overnight, as Hurricane Irma is downgraded to a tropical storm, amid little adverse news from the geopolitical arena,” said OCBC analyst Barnabas Gan. Irma had ranked as one of the most powerful Atlantic hurricanes on record. It was downgraded to a tropical storm on Monday after wreaking havoc across Florida.
Fears over North Korea receded slightly after the nation marked its founding day without further nuclear tests. The UN Security Council unanimously stepped up sanctions against North Korea on Monday over the country’s sixth and most powerful nuclear test on 3 September, imposing a ban on the country’s textile exports and capping imports of crude oil.
“We suspect that the dollar rally could have more room to run ... we could see a retracement in the precious metal to around $1,310-$1,315 before an element of underlying support sets in,” INTL FCStone analyst Edward Meir said in a note.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Spot gold may drop to $1,317 per ounce, as it has broken support at $1,332, said Reuters technical analyst Wang Tao.
Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, climbed 0.14% to 835.68 tonnes on Monday.
In other precious metals, silver prices fell 0.3% to $17.74 an ounce, while platinum was down 0.5% at $985.05. Palladium was 0.1% higher at $933.00 an ounce.
Editor's Picks »
- With fall of the last dove, MPC minutes portend more than one RBI rate hike
- RITES IPO ticks the valuations box, but not the growth one
- Is Reliance Jio really India’s most profitable telecom firm?
- How US-China trade war will affect India
- Dear ICICI Bank board, giving a red card to Chanda Kochhar is not enough