Gold slips 1 percent as dollar strengthens
(Reuters) – Gold slid 1 percent in Europe on Monday as the stronger dollar dented interest in the metal as an alternative asset, with investors buying the currency as a safe store of value amid fears over the economic outlook.
Strength in the U.S. unit kept most dollar-priced commodities under pressure, as it made them more expensive for holders of other currencies, analysts said.
Spot gold was bid at $922.30 an ounce at 1241 GMT, against $932.30 an ounce late in New York on Friday.
U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $8.70 from Thursday’s close to $922.30 an ounce.
“There is a sell-off with the dollar strength,” said Standard Bank analyst Walter de Wet. “Gold is holding up quite well, compared to the other commodities. At these levels, we might see some physical buying.”
He said while this may lend support to prices, a break of the $920-922 level could lead to a retracement back to $900.
The dollar, along with the yen, gained broadly on Monday amid fears over the economic outlook, which led investors to shun riskier assets in favour of currencies perceived to be safe.
Investor confidence across the market has been subdued since weaker than expected jobs data from the United States last week. While gold often benefits from uncertainty in the wider markets, it is currently taking its cues chiefly from the dollar.
Categorised as: Gold News