Gold slumps to three-week low as investors turn their attention to equities
The precious metal, which is considered a safe bet, lost some ground as positive data out of China eased investor concerns
Bengaluru — Gold prices slipped to a more than three-week low on Tuesday as waning global economic slowdown concerns lifted the dollar and equity markets.
Spot gold was flat at $1,286.85/oz by 3.32am GMT, after touching its lowest since March 8 at $1,285.80 earlier in the session.
US gold futures were down about 0.2% at $1,291.30/oz.
“Concerns we saw emerge in the past few weeks around economic growth have certainly eased and that shift [in sentiment] in the past day or two resulted in a little bit of selling in gold market,” ANZ analyst Daniel Hynes said.
“Most of the global growth is coming from China and the [Chinese] data over the weekend eased those concerns.”
Strong manufacturing data from the US and China triggered a massive sell-off in the US bond market, which in-turn lifted Asian equities to seven-month highs.
The dollar index, which tracks the currency against key rivals, was trading close to a three-week high posted on Monday. A stronger dollar makes gold expensive for holders of other currencies.
Following upbeat factory activity data from China released on Sunday, a private business survey on Monday showed that the economy’s manufacturing sector unexpectedly returned to growth for the first time in four months in March.
This was followed by a better-than-expected US manufacturing report, which showed that activity rebounded a bit more than expected in March.
Indicating investor sentiment for bullion, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 1.5% on Monday, its biggest one-day percentage decline in a month.
On the technical front, the $1,275 to $1,280/oz level remains the key longer-term support for gold, according to an Oanda note.
Among other precious metals, silver was down 0.4% at $15.05/oz.
Spot palladium was down 0.6% at $1,412.16/oz, after rising the most since late February in the previous session.
Platinum rose 0.2% to $849.37/oz.