Publications
Partners
Singapore - Spot gold slid to a seven-week low on Tuesday, extending a 2.6% decline in the previous session, as worries about the eurozone debt crisis continued to grip investors after the euphoria over the European Union summit agreement faded.
Equities headed for a second day of losses and the euro languished near a two-month low as investors took fright at the prospect of mass eurozone sovereign ratings downgrades, after the outcome of a “last chance” EU summit failed to convince markets.
“It’s all about anxiety and worry,” said Nick Trevethan, senior commodities strategist at ANZ in Singapore. “Gold is just getting lumped in with other markets as risky assets, not necessarily for the right reason.”
Wild swings in gold prices since August have tarnished its reputation as a safe haven, and bullion has moved in tandem with riskier assets in the past few months.
Spot gold lost 0.7% to $1 653.50 an ounce by 07:26 GMT, after posting its biggest one-day drop in nearly three months in the previous session. It touched $1 650.89 earlier, its lowest since October 25.
US gold declined 0.6% to $1 657.70. The $1 650 level should provide strong support for gold, analysts said. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported that its holdings dropped 0.605 tonnes to 1 294.796 tonnes by December 12, the lowest in three weeks.
Physical buying picked up in Asia after the sharp decline in prices, but many were hesitant to buy in bulk ahead of the year-end, especially as market sentiment remains fragile on concerns about Europe’s troubles, dealers said.
“Demand started to come in last night, but the amount has not been massive,” said a Singapore-based dealer, adding that jewellers and bullion dealers from Indonesia and Thailand have been active buyers.
Investors will closely watch for any move by Standard & Poor’s, which last week warned of a possible downgrade of 15 eurozone nations. In addition, the Italian and Spanish bond sales later this week will be a barometer of market sentiment.
Spot platinum edged up 0.1% to $1 481.49/oz, off a seven-week low of $1 476.23 hit in the previous session. The gold-platinum spread stood at just above $173/oz, its narrowest level in two weeks, after the sharp price drop in bullion.
Equities headed for a second day of losses and the euro languished near a two-month low as investors took fright at the prospect of mass eurozone sovereign ratings downgrades, after the outcome of a “last chance” EU summit failed to convince markets.
“It’s all about anxiety and worry,” said Nick Trevethan, senior commodities strategist at ANZ in Singapore. “Gold is just getting lumped in with other markets as risky assets, not necessarily for the right reason.”
Wild swings in gold prices since August have tarnished its reputation as a safe haven, and bullion has moved in tandem with riskier assets in the past few months.
Spot gold lost 0.7% to $1 653.50 an ounce by 07:26 GMT, after posting its biggest one-day drop in nearly three months in the previous session. It touched $1 650.89 earlier, its lowest since October 25.
US gold declined 0.6% to $1 657.70. The $1 650 level should provide strong support for gold, analysts said. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported that its holdings dropped 0.605 tonnes to 1 294.796 tonnes by December 12, the lowest in three weeks.
Physical buying picked up in Asia after the sharp decline in prices, but many were hesitant to buy in bulk ahead of the year-end, especially as market sentiment remains fragile on concerns about Europe’s troubles, dealers said.
“Demand started to come in last night, but the amount has not been massive,” said a Singapore-based dealer, adding that jewellers and bullion dealers from Indonesia and Thailand have been active buyers.
Investors will closely watch for any move by Standard & Poor’s, which last week warned of a possible downgrade of 15 eurozone nations. In addition, the Italian and Spanish bond sales later this week will be a barometer of market sentiment.
Spot platinum edged up 0.1% to $1 481.49/oz, off a seven-week low of $1 476.23 hit in the previous session. The gold-platinum spread stood at just above $173/oz, its narrowest level in two weeks, after the sharp price drop in bullion.
