SINGAPORE. – Gold languished near a four-week low yesterday, retaining sharp overnight losses, as strong US economic data and outflows from bullion-backed exchange traded funds sapped investor interest. Spot gold was little changed at $1 106,65 per ounce by 3.39am GMT, after losing 1,4 percent in the previous session — its biggest daily drop since July 20. The metal slid to $1 101,11 on Wednesday, its lowest since August 11. US gold was up 0,4 percent at $1 106,10, but largely holding on to a 1,7 percent drop overnight. Gold could see further weakness leading up to the Federal Reserve policy meeting on September 16-17, traders said.
Prices could head back towards July lows as bullion broke through some key technical levels in Wednesday trade, said analysts at ScotiaMocatta. The July low of $1 077 for spot gold was the weakest since February 2010.
“The $1 100 level should prop up gold during Asian trade today as physical names look to snap up the metal at these levels,” said MKS Group trader Sam Laughlin. The $1 115-$1 120 range should cap any moves higher, although the metal could again see further downward pressure in London and New York once Chinese demand was removed, he said. Many traders were awaiting the US central bank’s next policy statement on September 17 for clues on the timing of a US interest rate rise, before taking any big positions in gold.
Bullion has benefited in recent years from ultra-low rates, which cut the opportunity cost of holding bullion while holding the dollar in check. – Reuters.