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Gold on track for second week of falls

Gold steadied on Thursday to around $1,700 an ounce after its decline to one-month lows this week triggered some bargain hunting, with a slightly weaker dollar adding support to the precious metal.

Gold’s rise echoed gains in commodity markets, but concerns about theeuro zone debt crisis continued to weigh on sentiment.

Although gold is regarded as a safe haven asset to shield investors in times of uncertainty, it has increasingly become prone to pressure from selling in the wider financial market, moving in tandem with other assets as investor sentiment remains fragile.

Spot gold traded at $1,694.29 an ounce at 1448 GMT, up 0.1 percent from $1,692.79 late in New York on Wednesday. On Monday it hit a one-month low at $1,665.88 an ounce.

The precious metal is set for its second straight week of falls, down 1.5 percent so far this week.

“Gold is having some difficulty holding above the $1,700 level over the last few days. The U.S. dollar will probably dictate where we head from here,” Ross Norman of Sharps Pixley said.

The dollar traded slightly lower against a basket of currencies. A stronger dollar makes commodities priced in U.S. dollars cheaper for holders of other currencies.

“The market tends to quieten down by the first week of December and we’re getting to the point where those who want to take profits after a pretty good year will start to do.”

Gold, which hit a record above $1,920.30 in September, is up more than 19 percent in the year-to-date. So far in November it has lost 1 percent.

Trading was subdued due to the Thanksgiving holiday in the United States. U.S. gold futures was down 0.2 percent at $1,693.40 an ounce. – Reuters

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Posted by on Nov 24 2011. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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