SINGAPORE: Gold slipped 1 per cent on Friday after posting its largest daily per centage gain in more than a week the previous day, as the US dollar turned higher against the euro and spurred selling. But firmer oil and equities could offer support around the three-week low of around $700 an ounce struck on Thursday.
Dealers said they expected steady physical buying from India, the world's main gold consumer, would also aid prices during the traditional wedding season, which runs until early next year. Gold was trading at $727.40 an ounce, down $7.35 from New York's notional close. Gold fell to $700.25 on Thursday before bouncing to a high of $736.75 on gains in equities. Trading was thin ahead of a weekend summit of industrialised and emerging nations on the global financial crisis, which has stirred fears of falling demand for commodities and prompted investors to dump risky assets, even including gold. "The G20 meeting over the weekend will most likely create another uncertainty andprompt short-term traders to square off their positions before the weekend," said William Kwan, bullion director at Gold Capital Management.
The Nikkei rose 3.4 per cent on Friday after US shares rallied the previous day on bargain-hunting. "We can continue to expect volatility for some time to come. I think the US dollar very much is the driver still," said Darren Heathcote of Investec Australia in Sydney. Gold, which hit an intraday high of $736 on Friday, has laboured to sustain the uptrend since hitting a two-month high of $931 in early October.
It fell to an 11-month of $860.80 three weeks ago, partly due to losses in equities that forced investors to cash in to cover losses.
