Gold steadies in Asia

04 Oct, 2018

Gold tracked back from its highest in over a week on Wednesday after Italy indicated it was open to cutting its budget deficit and debt, soothing investors' nerves and prompting a wider move back into riskier assets. Spot gold was little changed at $1,202.91 per ounce by 0934 GMT, having hit its highest since Sept. 21 at $1,208.32 earlier in the session. US gold futures were unchanged at $1,207.10.
"The situation is calming down a little bit. It's a little bit of a move into riskier assets in the euro zone that is slightly dampening gold," said Peter Fertig, analyst at Quantitative Commodity Research.
"Unless there is a meltdown in Italy or a financial crisis, which would also impact US markets, there is no strong reason for a jump in gold prices. I expect more sideways trading around the present levels with plus or minus around $20," Fertig added.
Gold prices have fallen for the past six months, losing over 11 percent, largely due to dollar strength, with the US currency benefiting from a vibrant economy, rising US interest rates and fears of a global trade war.
"Gold has come down quite a lot in recent months and does seem to be taking a pause. We still think the dollar is going to be the key driver moving forward for prices," said ING analyst Warren Patterson. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.32 percent to 23.72 million ounces on Tuesday.

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