Gold is poised for a weekly decline, trading near the lowest level in six weeks, as the dollar’s strength erodes investor demand for the metal.
Gold for immediate delivery traded little changed at $US1090.35 an ounce in Singapore. The metal has dropped 1.5 per cent this week as the dollar rose 1.6 per cent against an index of six major currencies, the biggest gain since December. The metal slumped to $US1085.30 on March 24, its lowest level since Feb. 12.
"There is still big downside selling pressure from a strong dollar," said Takahiro Izumi, a precious metals trader with Sumitomo Corp in Tokyo. Still, "there is very good physical demand from investors in Asia," which is making gold prices resilient to financial turmoil in Europe, he said.
The dollar traded near a 10-month high against the euro as European Union leaders met in Brussels to try to assist Greece’s efforts to cut its budget deficit. Concern over the ability of European nations including Portugal and Greece to reduce deficits has dragged the euro down this year.
Ten of 20 traders, investors and analysts surveyed by Bloomberg, or 50 per cent, said bullion would fall next week. Six forecast higher prices and four were neutral.
Gold for April delivery in New York dropped 0.2 per cent to $US1091.50 an ounce, a 1.5 per cent loss this week.
"The underlying problems of heavily indebted euro zone economies are overshadowing everything at the moment and weighing heavily on the single currency," Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. "The euro will still suffer and could still drag gold a tad lower."
Silver for immediate delivery decreased 0.2 per cent to $US16.585 an ounce, palladium slipped 0.2 per cent to $US451.75 and platinum declined 0.6 per cent to $US1595.50 an ounce.
