Gold price slips, but decline in equities limits losses
Singapore (Jan 14) Gold edged lower on Thursday as the market paused after last session’s 0.6% gain, which was triggered by falling global equity markets and weakness in the dollar.
Asian shares skidded as markets took their cue from steep losses on Wall Street as an overnight rout in oil prices heightened worry about the global economy.
"It is a bit of profit-taking at the moment," Lee Cheong Gold Dealers chief dealer Ronald Leung said in Hong Kong.
"The focus is on equity markets and currencies, Dow was down and we are seeing further pressure on Asian stock markets."
Spot gold had fallen 0.1% to $1,092.25/oz by 2.13am GMT and US gold futures gained 0.5% to $1,092.5.
US stocks sank on Wednesday, pushing the S&P 500 to a close below 1,900 for the first time since September as investors grew anxious about weak energy prices, US corporate earnings and the global economy.
Sentiment soured for the greenback, which retreated from a one-week high against a basket of major currencies as US stocks fell.
The deepening slide in oil and concern about China’s economy have rattled equity markets, which have failed to sustain any significant rallies in early 2016.
Chicago Federal Reserve Bank president Charles Evans said he was nervous about the potential effects of China’s slowdown on the US economy and about the possibility that inflation expectation may be slipping.
The Fed raised US interest rates in December and attention has shifted to how many increases will follow in 2016. Rate hikes typically lower demand for noninterest-paying gold while boosting the dollar.
Among other precious metals, palladium lost almost 1% to $479.76/oz, silver was down 0.1% at $14.121/oz and platinum fell 0.2% to $845.66.