By Lewa Pardomuan
SINGAPORE (Reuters) – Gold gave up early gains to fall more than half a percent on Thursday, hurt by a firmer dollar and as upbeat economic data dented its safe-haven appeal.
Robust U.S. auto sales numbers also reinforced expectations the U.S. Federal Reserve would start to curb its stimulus later this month. The central bank’s three quantitative easing schemes have buoyed prices for bullion, which is often bought as a hedge against inflation.
Gold hit an intraday high at $ 1,394.61 an ounce, before slipping to $ 1,385.50 by 0644 GMT, down $ 5.34 on the day.
It rallied to its highest in more than three months around $ 1,433 in late August on safe-having buying as the United States and its allies looked close to launching military strikes on Syria.
“If we break through the critical support level of $ 1,380, prices will go all the way down to at least $ 1,353. For now, they are many issues surrounding gold which are offsetting each other,” said Joyce Liu, an investment analyst at Phillip Futures in Singapore.
“I think the most prominent issue is the U.S. Federal Reserve meeting. The economy seems to be expanding – that provides the ground for them to taper the stimulus.”
U.S. gold fell $ 4.30 an ounce to $ 1,385.70.
Gold buyers In India lined up to restart imports on Wednesday as the customs department clarified new rules, putting the world’s biggest consumer back in the market after a six-week gap and threatening government efforts to underpin the rupee.
But there have not yet been any fresh enquiries from India, even though the rupee has bounced from all time lows, said physical dealers.
“The thing is that the import tax is still high in India, so I think that is dampening their buying interest. Also gold prices are still high at close to $ 1,400,” said a dealer in Hong Kong.
Gold is one of the biggest items in a record current account deficit that has helped push the rupee to an all-time low. New Delhi has raised the import duty on gold to an all-time high of 10 percent.
Premiums for gold bars in Hong Kong edged down to $ 2 an ounce to spot London prices from $ 2.50 in late August. In Singapore, some dealers offered gold bars at premiums of $ 1 an ounce, down from $ 1.50 last week because of sales from Indonesia and Thailand.
In other markets, stocks rose to three-week highs on Thursday as Indian shares and the rupee rallied a day after the country’s new central bank chief unveiled measures to support the currency and the banking sector.
(Editing by Joseph Radford)
YOUR COMMENT
