Gold slipped to a more than two-week low yesterday as a firm dollar and more risk appetite outweighed support coming from expectations of a pause in the US interest rate hike cycle. Spot gold was 0,2 percent lower at $1,279 per ounce by 1123 GMT, having hit its lowest since Jan. 4 earlier in the session of $1,277.11.
US gold futures were down 0,3 percent at $1,278.20 per ounce.
“Some calm has been restored in the equities market . . . We are seeing a bit of withdrawal of interest from the gold market,” said Macquarie commodity strategist Matthew Turner.
World markets showed some relief from Chinese economic data that were in line with expectations and offered some bright spots, although concerns about Prime Minister Theresa May’s plans for Brexit prompted some caution.
US markets were closed yesterday for a holiday.
“Gold could already find itself in increased demand today if the UK prime minister’s ‘Plan B’ for Brexit turns out to contain nothing new and the chaos thus continues,” Commerzbank analysts wrote.
A stronger dollar, near a two-week high, weighed on gold, which rose more than 10 percent since mid-August mainly on the back of equity market turmoil and a weak dollar.
ActivTrades chief analyst Carlo Alberto De Casa said a breakout through $1,277 for gold could lead the price down to $1,260.