Gold slips after commodities sell-off
Singapore, September 18, 2012
Gold edged lower in volatile trade on Tuesday after commodity markets plunged overnight and investors booked profit from a recent rally sparked by the Federal Reserve's aggressive round of stimulus efforts.
But worries that central bank money-printing will ultimately stoke inflation could prompt more buying in gold, which rallied to its highest in nearly seven months last week after the Fed launched a third round of bond buying.
Gold dropped $4.21 an ounce to $1,756.74 by 0247 GMT. Oil, metals and grains market tumbled on Monday on worries about the demand outlook for those commodities.
"I would simply call it profit taking, if you want. But I think it's within the range of a solid performance that we've seen over the last two weeks or even a month. So nothing unusual," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.
"So from that angle, the view doesn't change. $1,950 remains the three-month target on the back of investors searching for real assets, the need for real assets. The risk for further dollar weakness is clearly here a supportive factor."
Gold hit a record of about $1,920 in 2011, when investors turned to the metal as a safe haven during the debt crisis in Europe. - Reuters