Gold slips with oil; softer dollar fails to lift yellow metal
SINGAPORE: Gold slipped on Monday, tracking lower oil prices, but failed to get safe-haven bids despite weakness in the dollar and Asian equities as liquidity remained thin in a holiday-shortened week.
Spot gold eased 0.1 per cent to $1,074 an ounce by 0259 GMT. Silver dropped 0.5 per cent to $14.27.
Oil prices fell after the long Christmas week-end, with international crude and product markets still well supplied in excess of demand.
Gold is positively correlated to oil as the metal is seen as a hedge against petroleum-led inflation. The dollar index also fell, edging towards a two-month low hit earlier in the month.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2 per cent, though Japan’s Nikkei was up 0.2 per cent.
Some markets, including Australia and many in Europe, will remain closed on Monday after Friday’s Christmas holiday. Many markets will also be shut this coming Friday for New Year’s Day.
“As it is a holiday shortened week, I don’t think we would see much action. Having said that, we could see some sharp moves because of the paltry liquidity in markets,’’ said a precious metals trader in Hong Kong.
“Early next year, gold should move lower as the dollar will remain strong in the first half of next year,’’ he said.
Any price moves will also be impacted by the pace of US interest rate hikes, the trader said.
Read full article: The Hindu Business Line
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