Gold fell slightly from its highest level in almost six weeks early Tuesday, as stocks rebounded and physical demand in China slowed from a week ago.
Sentiment in bullion market is subdued again this week, with traders still holding their grounds ahead of the Federal Reserve`s Jan. 28-29 policy meeting, when the US central bank would probably signal another apering of monetary stimulus in the wake of the upbeat outlook for the world`s largest economy. However, prices are still hovering shortly below the six-week peak hit yesterday.
Spot Gold edged down in thin trade shedding a soft 0.10% to $1,253.16 an ounce as of 02:38 EST, compared with the day`s open at $1,254.35 and little changed from six-week high of $1,258.28.
The rebound in Asian stocks and European futures took its toll on the metal this morning, after China`s money-market rates fell the most in four weeks, as the People`s Bank of China followed up Monday`s late liquity injection with another burst of emergency lending to commercial banks on Tuesday.
Adding more pressure on the metal, the dollar gained the most agaisnt a six-currency basket since mid-November last year. The Dollar Index (USDIX) hit a fresh two-month high of 81.32 from 81.19.
Among other precious metals:
- Spot Silver -0.96% at $20.12 an ounce
- Spot Platinum -0.55% at 1,456.25 an ounce
- Spot Palladium -0.30% at 747.20 an ounce
Platinum eased slightly from its highest level since October hit yesterday, as miners brace for the biggest stoppage since the clash of 2012.
Anglo American Platinum is expected to be served with strike notice after vote by members of Association of Mineworkers and Construction Union day in Rustenburg, northwest of Johannesburg. The vote is expected to bring a large portion of country`s mining sector to a halt on Thursday.
In August 2012, protests between rival unions at Marikana mine, 60 miles north-west of Johannesburg, owned by UK-based Lonmin, led to nine deaths, as several thousand miners held a strike over working conditions.
South Africa produces 85% of the world`s platinum, and a prolonged would probably put severe pressure on the profits of mining houses.