Gold slipped to a three-week low on Wednesday before recovering on bargain hunting, but the precious metal was losing its safe-haven appeal for investors on hopes a US military strike against Syria could be averted.
Syria has accepted a Russian proposal to give up chemical weapons but US President Barack Obama said it was too early to tell if the initiative would succeed, vowing to keep military forces at the ready to strike if diplomacy fails.
Gold, which has fallen more than 18 percent this year, is also being hurt by expectations the US Federal Reserve will opt to taper its monetary stimulus programme after the Fed's Open Market Committee meeting on Sept. 17-18.
Spot gold hit a low of $1,356.85 an ounce, its weakest since August 22, and was steady at $1,364.01 by 0343 GMT. The Fed's three quantitative easing schemes have buoyed prices of gold and other commodities.
"It's really a confluence of three things," said Mark Keenan, a cross-commodity research strategist at Societe Generale in Singapore.
"Currency weakness, specifically in India, the tapering that we believe will be announced in (FOMC) meeting, and a slight deterioration in the requirement of having a safe haven in the light of these strikes in Syria possibly being averted." US gold was little changed at $1,364.20 an ounce.
Asian shares rose on Wednesday, on track to post their 10th straight day of gains, while investors gave the safe-haven yen a wide berth as optimism for the Chinese economy grew and worries about US military strikes on Syria receded.
US crude for October delivery was down 54 cents at $106.85 a barrel.
"Over the days ahead, we likely will see various markets continue to breathe a bit easier, meaning that the crude oil markets will likely remain very vulnerable to more downside pressure," said Edward Meir, an analyst at INTL FC Stone.
"Although gold may decline in sympathy as well, we think it is in store for a much larger break once the Fed announces its tapering decision next week."
The physical market has yet to pick up in Asia and other regions even though gold
No comments:
Post a Comment