Gold Price Holds Near Four-week Low as Fund Outflows, U.S. Data Weigh
Singapore (Sept 10) Gold languished near a four-week low on Thursday, retaining sharp overnight losses, as strong U.S. economic data and outflows from bullion-backed exchange traded funds sapped investor interest.
Spot gold was little changed at $1,106.10 an ounce by 0637 GMT, after losing 1.4 percent in the previous session - its biggest daily drop since July 20. The metal slid to $1,101.11 on Wednesday, its lowest since Aug. 11.
U.S. gold was up 0.3 percent at $1,105, but largely holding on to a 1.7 percent drop overnight.
Gold could see further weakness leading up to the Federal Reserve policy meeting on Sept. 16-17, traders said.
Prices could head back towards July lows as bullion broke through some key technical levels in Wednesday trade, said analysts at ScotiaMocatta. The July low of $1,077 for spot gold was the weakest since February 2010.
"The $1,100 level should prop up gold during Asian trade today as physical names look to snap up the metal at these levels," said MKS Group trader Sam Laughlin.
The $1,115-$1,120 range should cap any moves higher, though the metal may again see further downward pressure in London and New York once Chinese demand is removed, he said.
Many traders were awaiting the U.S. central bank's next policy statement on Sept. 17 for clues on the timing of a U.S. interest rate rise, before taking any big positions in gold.
Bullion has benefited in recent years from ultra-low rates, which cut the opportunity cost of holding bullion while holding the dollar in check. But expectations that rates will rise soon have pushed the metal down more than 6 percent this year.
Economic data on Wednesday showed U.S. job openings surged to a record high in July and employers appeared to have trouble filling openings, the latest signal of an increasingly tight labour market that could push the Federal Reserve closer to raising interest rates.
Investor interest in gold has been tepid. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.61 percent to 678.18 tonnes on Wednesday - the biggest drop since Aug. 12.
A drop in Asian equities on Thursday failed to prop up gold, often seen as a safe haven.
Asian stocks fell on Thursday after lacklustre Chinese and Japanese economic data added to heightened worries about slackening global growth, denting investors' appetite for riskier assets.
Source: NewIndianExpress
