SG:Gold eases after four day rally as firm dollar hurts
Reuters reported that gold slipped as investors took profits after a sharp four day rally pushed prices up to a one month top in the previous session while a firm US dollar also hurt sentiment.
Bullion added nearly 6% in the past four sessions biggest such rise since October 2011 as receding worries of an imminent cut to the US Federal Reserve's stimulus burnished the precious metal's appeal as a hedge against inflation.
The Fed has said that it will only start phasing out its stimulus once it is sure the economy is strong enough to stand on its own.
Spot gold dropped 0.5% to USD 1,341.16 an ounce by 0655 GMT after rising to a one month peak on Tuesday as speculators bought back bearish bets ahead of an option expiry later this week.
Mr Peter Fung head of dealing at Hong Kong's Wing Fung Precious Metals said that "The selling interest is prompted by profit taking. Weak data from China dragged on sentiment across financial markets, while a US dollar recovery hurt assets priced in the greenback by making them more expensive for holders of other currencies.ā€¯
A preliminary survey showed that activity in China's manufacturing sector slowed to an 11 month low in July suggesting the world's No.2 economy is still losing momentum.
Phillip Futures analysts said that "Prices are far off from the next level of resistance at USD 1,370 and we expect the positive momentum to taper today. Comex gold gained about USD 6 to USD 1,341.00 after a small decline in the previous session. Silver, platinum and palladium tracked gold lower.
