Bullion prices were unaffected by a spate of deadly attacks by gunmen in Mumbai, despite gold’s reputation as a haven from geopolitical risk.
Spot gold was quoted at $813,20-$815,20/oz by mid-afternoon, little changed from $811,75/oz late in New York on Wednesday. The dollar weakened against the euro yesterday, rolling back some of the previous session’s gains, as worse than expected US economic reports renewed fears over the prospect of a deepening global recession. A softer dollar tends to benefit gold, which is often bought as a currency hedge. “If you think the US dollar has peaked, gold’s outlook is good,” David Thurtell of Citi Bank said. However, weakness in gold’s other main external driver, crude oil, was weighing on prices.
Oil fell towards $53 a barrel after US stocks and oil demand data released on Wednesday increased worries over falling consumption.
The bullion market largely shrugged off news of the violence in Mumbai. “You would expect that this could have (affected) gold but there wasn’t any buying or selling on the news,” Michael Blumenroth of Deutsche Bank said. Reuters
