Spot gold could fall towards $US1,687 an ounce during the day, said Reuters market analyst

Gold traded steady on Monday after its biggest weekly loss since September, as investors remained cautious even after Spain’s centre-right opposition won a landslide victory in the election and is expected to launch drastic austerity measures.

Market reaction to the news has been wary, with Asian shares dipping and the euro got off to a subdued start in early trade.

Gold has moved in tandem with riskier assets, and is still in danger of suffering sharp losses in case of sell-offs in other markets, as investors would have to liquidate their gold positions to cover losses elsewhere since funding has become difficult during the market turmoil in recent months.

“We still have not seen the light at the end of the tunnel yet,” said Ong Yi Ling, an analyst at Phillip Futures. “We will continue to have headlines from Europe to dominate the sentiment in the market.”

Uncertainty also hangs over the market about U.S. efforts to reduce its deficit. The top Republican and Democrat on the congressional deficit-reduction panel will say on Monday they have been unable to reach a deal after months of effort, congressional sources said.

Spot gold edged down 0.1 per cent to $US1,723.29 an ounce by 0313 GMT, after a weekly decline of more than 3 per cent.

On the chart, the 50-day moving average is almost crossing below the 100-day moving average, seen as a bearish technical signal.

U.S. gold was little changed at $US1,724.20, after having fallen to as low as $US1,713.2 earlier in the day.

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Posted by admin on Nov 21 2011. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry