The price of gold eased on Tuesday as investors locked in gains following the biggest one-day rise in six weeks, after news of a string of high-profile arrests in Saudi Arabia sent the price of oil to a 2-1/2 year high, and the dollar and US Treasury yields sank. Spot gold was down 0.3 percent at $1,275.99 an ounce at 1455 GMT, while US gold futures for December delivery were $4.90 an ounce lower at $1,276.70.
The price rallied in New York trading on Monday to end the day up nearly 1 percent, erasing losses made in earlier trading and throughout the previous session. The Saudi-led jump in the oil price, a drop in the US dollar and jitters linked to US President Donald Trump's trip to the Far East all conspired to push gold prices higher, MKS's head of trading Afshin Nabavi said.
However, the price was struggling to maintain those gains, he added, and stuck broadly within the $20 range of the past two weeks. "It is only going with oil and the US dollar," he said. "Gold is not providing any reason to be bought." The dollar rose 0.3 percent versus the euro on Tuesday as investors added bets that monetary policy would continue to diverge between the United States and the euro zone.
Meanwhile oil prices dropped back slightly, having risen sharply after Saudi Arabia's Crown Prince Mohammed bin Salman tightened his grip on power through an anti-corruption purge by arresting some of the kingdom's political and business elite. The campaign of arrests continued on Monday with a top entrepreneur reported to have been detained.
US President Donald Trump's visit to South Korea could also provide gold with some support over the next few days, traders said. Among other precious metals, silver was down 0.7 percent at $17.10 an ounce after hitting its highest since Oct. 20 at $17.27 earlier in the session.
It outstripped gains in gold during Monday's rally, ending the day 2.5 percent higher. That pushed the gold/silver ratio to its lowest since mid-September at 74.39. "Not only was silver pulled up by gold yesterday - its gains were also twice as pronounced," Commerzbank said in a note. "Silver... is only just below the 200-day moving average. Any rise above this mark could spark technical follow-up buying and lend further buoyancy to the silver price." Platinum was down 1.4 percent at $921 an ounce, while palladium was 0.5 percent lower at $995.47.
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