Gold extends losses as delay in Syria action
Singapore, September 3, 2013
Gold edged lower for a fourth straight session on Tuesday as a delay in a potential US strike on Syria and strong global economic data dented bullion's safe-haven appeal.
The precious metal has dropped 3 per cent since hitting a three-and-a-half-month top last week, failing to hold above the psychological $1,400 mark. The decline follows a 21 per cent jump since hitting an almost three-year low of $1,180.71 in June.
"Prices have gone too far too fast," said Victor Thianpiriya, an analyst at ANZ in Singapore.
"A lot of the rally that we have had is on short covering. We haven't really seen investors wanting to own more gold."
The metal saw some upside last week as a US strike on Syria seemed imminent. However, tensions have eased as US President Barack Obama has now sought Congressional approval before any military action.
"(The Syria situation) will be a bit supportive for gold if things start to escalate. If things get severe, people will start to dump riskier assets such as equities and that will provide a natural support for gold and other safe-haven assets," Thianpiriya said.
Spot gold slipped 0.1 per cent to $1,392.90 an ounce by 0342 GMT, while US gold fell about $3 to $1,393.10.
Upbeat factory data from around the globe powered Asian markets on Tuesday.
European factories experienced robust growth in August and China bounced back on rising demand, lifting prospects for broad-based recovery on the back of a US revival.
The delay in possible military action against Syria has now shifted the focus to the US Federal Reserve' stimulus measures, which are widely expected to see some sort of scale back from this month.
Markets are awaiting US non-farm payrolls data on Friday for clues on when the Fed could start tapering its $85 billion monthly bond purchases. The central bank holds a two-day policy meeting beginning on September 17. - Reuters