Gold falls to 16 week low

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Gold extended losses to a third straight session on Thursday, hitting fresh 16-week lows on a stronger dollar and weak physical demand in top buyer China.

Spot gold fell to $1,251.70 an ounce - its lowest since early February, before recovering slightly to trade down 0.4 percent at $1,253.41 by 0638 GMT. It dropped nearly 3 percent over the past two sessions.

The U.S. dollar hovered at a two-month high against a basket of major currencies, while Asian shares consolidated recent gains.

A stronger dollar makes gold more expensive for holders of other currencies, while higher equities dent the precious metal's appeal as an investment-hedge.

"I think prices are going to fall below $1,230 because we don't see any physical demand to support these lower levels," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "The markets are very bearish at the moment, with the strong dollar is also hurting gold's appeal."

Demand in No. 1 bullion consumer China failed to pick up significantly despite the sharp drop in prices.

Chinese premiums to global prices were largely unchanged at about $2-$3 an ounce from before the price drop, indicating that strong buying has not materialised.

Bullion investors were eyeing developments in Ukraine, where relative calm returned to the streets of Donetsk on Wednesday after the biggest battle of the pro-Russian separatist uprising in eastern Ukraine.

An uncertain geopolitical situation creates safe-haven demand for gold.

Among other precious metals, platinum gained 0.2 percent while palladium was largely holding near its highest in almost three years hit in the previous session.

A deadlock in South Africa's crippling 18-week platinum strike will soon be broken after movement made on both sides of the wage dispute, the country's new mines minister Ngoako Ramatlhodi declared on Wednesday.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Features & Analysis
Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

1
Gold industry shifts east as Dubai plans huge refinery

Gold industry shifts east as Dubai plans huge refinery

$60m refinery being built by Kaloti Precious Metals in Dubai...

1
Dubai gold dealers shun Turkish bars on fear of links to Iran

Dubai gold dealers shun Turkish bars on fear of links to Iran

Trade in Turkish gold bars to Iran via Dubai is drying up as...

2
Most Discussed