Gold slid to its lowest in nearly three weeks on Wednesday as the dollar jumped and stock markets regained momentum following a spate of heavy losses, pointing to an improved environment for riskier investments.<\/p>\n
The metal, however, remained on track to end a six-month long run of losses, the longest such streak since a period from August 1996 to January 1997. It has risen more than 2 percent so far in October, the biggest monthly gain since January.<\/p>\n
Spot gold was 0.5 percent lower at $1,217.08 an ounce at 1025 GMT, having touched its lowest since Oct. 11 at $1,214.07 earlier. U.S. gold futures fell 0.6 percent to $1,218.5 an ounce.<\/p>\n
\u201cThe dollar index looks like it\u2019s going higher and there is uncertainty related to the mid-term elections next week,\u201d said Alasdair Macleod, head of research at GoldMoney.com. \u201cIf there are signs that the Republicans are going to do well, this will probably lead to yet more dollar strength.\u201d<\/p>\n
\u201cThe dollar versus the emerging market currencies, especially the Chinese yuan, is something the market is looking at. The depreciating yuan is the key reason why gold has been weak,\u201d said Julius Baer analyst Carsten Menke.<\/p>\n
\u201cGold benefited quite a lot from the equity market jitters we had in the past week or so. Now the equity markets are calming a bit and trying to build a bottom at these lows, which is also negative for gold,\u201d Menke added.<\/p>\n
European shares rallied, carrying forth the positive momentum in global stock markets, bringing some relief after a brutal October in which equities suffered one of their worst drops in a decade and spooked investor confidence.<\/p>\n
Gold has fallen around 11 percent since April, hit by rising U.S. interest rates and a global trade war that threatened economic growth, prompting investors to rush to the safety of the dollar instead.<\/p>\n
\u201cAs long as inflation doesn\u2019t become a real threat or equities plunge much further from current levels, many investors will prefer yielding instruments than investing in gold, and that\u2019s what the dollar is providing,\u201d said Hussein Sayed, Chief Market Strategist at FXTM.<\/p>\n
\u201cGold is likely to trade within a narrow range of $1,200 $1,250, until new factors emerge … It needs a bigger trigger to see another rally similar to the one seen since the beginning of the month,\u201d Sayed added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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