Gold edged lower today as today’s sell-off in global stock markets boosted the US dollar, which is seen as an alternative asset to the yellow metal.
Traders dumped stocks after president of BHP Billiton’s iron ore business Ian Ashby warned that iron ore demand from China was flattening as its industrial expansion is slowing.
Ashby’s comments came a few weeks after the world’s second largest economy reduced its GDP growth guidance from the longstanding target of eight percent to 7.5 percent for 2012.
Concerns about slowing economic growth in China dampened sentiment in equity markets, while boosting demand for the safe haven greenback.
Gold was able to claw back some of its early losses later in the session thanks to support from bargain hunters, which started buying the yellow metal after spot prices slipped below US$1,645 per ounce.
Gold traded at US$1,652 in early afternoon, down US$11 from Monday’s close. Silver slipped 75 cents to US$32.17/oz and platinum pulled back US$26 to US$1,654/oz.
