LONDON: Gold edged lower yesterday as a rise in the dollar capped four days of gains, though the metal remained supported around the $1,220 level by the prospect of a widespread economic slowdown that could keep interest rates low.
Strength in the US currency drove commodities lower across the board, with Brent crude oil futures earlier tumbling more than one percent towards a four-year low, while worries about the world economic outlook hit stock markets.
Spot gold was down 0.3 percent at $1,219.94 an ounce at 1405 GMT, while US gold futures for December delivery were down $4.50 an ounce at $1,220.60.
“We saw a great bounce from the triple bottom, but once again momentum faded,” Sharps Pixley CEO Ross Norman said.
“Gold is now at the top end of the range $1,183-$1,240 at the moment tracking sideways, looking to see whether the US dollar should weaken ... but at the moment we don’t see it getting through resistance at $1,240.”
Gold hit a 15-month low of $1,183.46 on Monday after strong US jobs data fuelled talk that US interest rates could rise sooner rather than later. Gold has since rebounded, however, and remains on track to post its biggest weekly gain in four months.
The gold recovery gained momentum after minutes of the Fed’s September meeting, released on Wednesday, showed that officials were struggling with how to deal with the dual threats of a stronger dollar and a global slowdown.
The minutes prompted investors to bet that the US central bank is in no rush to tighten policy after years of monetary stimulus.
Reuters
