Spot Gold Lower Consolidates After Strong Gains
London (July 22) Spot gold nudged lower Tuesday, consolidating after a run of gains made on the back of escalating geopolitical risk.
"Owing to escalating tensions in Palestine as well jitters over Ukraine (and fears of fresh sanctions against Russia after the Malaysian Airlines plane incident), bullion traded on its own accord," noted VTB Capital analyst Andrey Kryuchenkov in a note to clients. "The market decoupled from both the equity and currency markets after some fresh risk-averse inflows."
But the safe-haven bid proved to be short-lived. Gold fell 0.4% to $1,306.28 a troy ounce.
Analysts at Commerzbank said in a note that stronger equity markets, particularly in Asia, were also weighing upon gold prices.
Investors were also waiting for U.S. inflation data due later in the session, analysts said. Gold is often perceived as an alternative currency, a store of value and a hedge against inflationary pressures, in time of high risk.
Elsewhere in the precious metals group, spot silver fell 0.2% to $20.851 an ounce. Spot platinum fell 0.25 to $1,480.50 an ounce, while palladium fell 0.8% to $867 an ounce, both dragged lower by the losses for gold and silver.