LONDON: Gold recovered on Tuesday, rolling back earlier two percent losses, as the dollar slid for the third consecutive session against the euro after data showed that US GDP shrank more than expected in the third quarter.
But falling crude prices are continuing to pressure the market, analysts said. Spot gold was at $816.10/818.10 an ounce at 1546 GMT, down from $819.55 an ounce in New York late on Monday but well above its session low of $801.80. The precious metal posted its biggest two-day gain since early 2000 that session as the dollar tumbled, with risk aversion easing after the US government agreed to inject $20 billion to rescue Citigroup.
The rally in commodities and stocks which followed pulled gold in its wake, but as the dollar recovers a touch on Tuesday and oil prices slip after gaining 10 percent in two days, the precious metal is easing. A recovery in the dollar versus the euro is prompting some of this selling, analysts said. Gold is often bought as an alternative asset to the US currency and tends to move in the opposite direction to it. Other asset prices also gave up gains, weighing on gold.
Oil prices also fell, with US crude futures shedding more than $2 a barrel in early European trade after Monday’s near 10 percent rally. Gold typically moves in line with crude prices, as it is often bought as a hedge against oil-led inflation. Among other precious metals, spot silver tracked gold lower to $10.33/10.41 an ounce, against $10.47 in New York late on Monday.
Spot platinum slipped to $845/865 an ounce from $856, while its sister metal palladium was little changed at $191/199 an ounce against $190.50. reuters
