Gold dropped on Monday as crude oil prices tumbled, but losses were limited by recovering physical demand and expectations the Federal Reserve will wait before hiking interest rates. The metal came under pressure after US data showed services sector activity dipped to a six-month low in October, and a sharp pullback in crude oil after Goldman Sachs slashed its price forecasts, citing lackluster global demand.
"Evidence of recovering physical demand in Asia in response to the current low price environment gives confidence that the $1,180 support level may hold," said Jonathan Butler, precious metals strategist at Mitsubishi Corp International. Spot gold was down 0.1 percent at $1,229.23 an ounce by 2:10 pm EDT (1810 GMT), having moved in a narrow range of less than $6. The metal has now dropped in its fourth consecutive session.
US COMEX gold futures for December delivery settled down $2.50 an ounce at $1,229.30. Volume is lighter than usual, preliminary Reuters data showed. Among other precious metals, silver edged up 0.1 percent to $17.14 an ounce. Platinum rose 0.8 percent to $1,250.50 an ounce and palladium was up 0.8 percent at $782 an ounce.
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