Singapore - Gold slipped below $1 000 an ounce for the first time in almost a week on Monday after failing to revisit last year's record, with sluggish offtake from jewellers across Asia stepping up the selling pressure.
Gold hit $1 023.85 on Thursday, its strongest since March 2008 when it struck a record of $1 030.80, on uncertainties over the sustainability of the global economic recovery, but the dollar's rebound from a 1-year low eventually spurred selling.
Spot gold was quoted at $1 000.30 an ounce by 07:05, down $5.85 from New York's notional close on Friday. Bullion, which gained as much as 16% this year, fell to an intraday low of $999.05 an ounce on Monday.
"I think investors are probably a bit cautious. We've got here, where does it go next? Some people might sort of view now the upside from here has been more limited," said David Moore, commodities strategist at Commonwealth Bank of Australia.
"I am a bit of a bear on gold. I think gold would go back under $1 000. I think the physical demand for gold is still very weak. When investors start to look elsewhere, I think the gold price will fall back."
Trading was muted, with Japanese markets closed for a long holiday but dealers noted selling from speculators in other parts of Asia, driven by worries over the IMF's plan to sell gold and a firmer dollar.
The physical market in Singapore was closed for a Muslim holiday and purchases from jewellers in another bullion trading centre, Hong Kong, were scarce although gold has dropped more than 2% since hitting last week's multi-month highs.
The US dollar gained against the euro in thin trade on Monday, extending a rebound late last week on short covering ahead of a Federal Reserve policy meet on interest rates and a Group of 20 summit.
Disappointed selling
The Federal Open Market Committee is likely to hold rates steady at the meeting, which starts on Tuesday but markets want to know if there are signs that the super-accommodative policy stance will be wound back, given a pick up in economic data.
"I think we're seeing disappointed selling and everybody is actually expecting a correction after gold reached above $1 000," said a dealer in Hong Kong.
"Gold may fall back to $995 and we'll have to see whether it can hold there," said the dealer, referring to a level last seen in early September.
International Monetary Fund member countries on Friday formally endorsed a plan for strictly limited sales of 403.3 tonnes of gold from its stockpile but said sales would be done in a way that did not disrupt gold markets.
US gold futures for December delivery fell $8.80 an ounce at $1 001.5 on the Comex division of the New York Mercantile Exchange.
The noncommercial net long position in gold futures on Comex stood at an all-time high of 235 647 lots for the week to September 15, data from the Commodity Futures Trading Commission showed.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood unchanged at 1 086.479 tonnes on September 18.
- Reuters