By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) – Spot gold prices were moderately lower Monday late afternoon in East Asia, giving back some of the sharp gains in the previous session, as investors awaited cues on the direction of monetary policy from global central bankers gathered at the mountainside symposium in Wyoming.
Spot gold was down $11.60, or 0.7%, at $1,817.50 an ounce. The drop follows Friday’s surge that saw gold for December GC1Z +1.03% delivery rise $34.10, or 1.9%, to settle at $1,797.30 an ounce on the Comex division of the New York Mercantile Exchange.
Societe Generale said Monday it was concerned about the rising risk of deflation, citing slowing global growth and a policy bias toward short-term fiscal tightening.
It noted that gold, silver and the Swiss franc appeared to be marching to their own drummers as investors sought out safe havens, while oil and other commodities saw lower prices.
“As the euro suffers the fallout from mixed messages and the dollar faces the consequences of U.S. debt problems, precious metals and the Swiss franc appear to be the clear winners in the current debt crisis,” said SocGen analysts in a strategy note.
Silver for December delivery was up 0.5% from its last settlement, rising 19 cents to $41.19 an ounce.
Concerns about the sovereign-debt situation were brought back into focus on Saturday when the International Monetary Fund’s managing director, Christine Lagarde, said in Jackson Hole, Wyo., that the global economic recovery was “fragile” and warned of a “dangerous new phase.”
She urged leaders of major central banks to keep interest-rate policies “highly accommodative,” in an apparent reference to recent tightening by the European Central Bank.
Gold’s rise on Friday appeared to draw support from its recent sharp declines, even as U.S. Federal Reserve Chairman Ben Bernanke put off any discussion of economic easing measures until a policy meeting in late September.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
