FX:Gold little changed near 2-week low as dollar strengthens
Forexpros - Gold futures were little changed near a two-week low during European morning hours on Wednesday, as ongoing fears over the health of the global economy boosted demand for the U.S. dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,764.85 a troy ounce during European morning trade, easing down 0.01%.
Prices were stuck in a narrow trading range of USD1,766.95 a troy ounce, the session high and USD1,762.05 a troy ounce, the daily low and the lowest since September 27.
Gold prices were likely to find support at USD1,755.35 a troy ounce, the low from September 27 and resistance at USD1,781.55, the previous session’s high.
Market sentiment remained under pressure after the International Monetary Fund cut its 2012 and 2013 global growth forecasts on Tuesday, and warned of even weaker expansion unless officials in the U.S. and Europe address threats to their economies.
The IMF said that the world economy will grow 3.3% this year, the slowest since the 2009 recession, and 3.6% next year, compared with July predictions of 3.5% in 2012 and 3.9% in 2013.
Investors also remained cautious amid worries over how soon Spain may formally request a bailout and uncertainty over whether international creditors will extend loans to Greece.
Later in the day, Italy was to auction EUR11 billion of short-term government bonds. In addition, Spanish Prime Minister Mariano Rajoy was to hold talks with French President Francois Hollande in Paris.
The risk-off trade environment prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar and Treasuries.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 80.18. It rose to a one-month high of 80.31 earlier in the session.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere on the Comex, silver for December delivery dipped 0.35% to trade at USD33.87 a troy ounce, while copper for December delivery declined 0.2% to trade at USD3.711 a pound.
