Gold futures were down a seven-week high on Thursday as the US dollar took a break versus the yen, dulling the metal’s appeal as hedging. The oil markets and equity markets rallied from recent losses, dampening the appeal of the precious metal.
The weakness in oil prices has influenced the sentiment. While in energy prices marked higher on Thursday, they were still near five-year lows.
Gold tends to fall in tandem with oil as the weaker energy prices tired the metal’s appeal as a hedge against inflation fueled by oil.
On the Comex, Gold futures edge for February delivery dropped $ 5.70, or 0.46%, to trade at $ 1223.80 a troy ounce.
Spot gold had eased 0.2 percent to $ 1,224 an ounce. The metal rose to a seven-week high of $ 1238.20 on Wednesday but failed to hold onto such gains and ended the day down by 0.3 percent.
An upgrade in sentiment was seen in the holdings of SPDR Gold Trust. The fund saw the influx of nearly 3 tonnes on Wednesday, bringing the total holdings of 724.80 tonnes.
Market operators downplayed concerns about political instability in Greece and new restrictions on the bond markets of China ahead of a statement of key data from the European Central Bank.
The ECB will publish the results of its second round of cheap loans to banks in the region, known as an operation of long term financing directed or TLTRO later in the session long term.
A lower than expected occupy will add to the expectations of QE by the ECB.
“Weekly unemployment figures in the US is going to come today. Retail sales and business as well as the inventory data will be released today. Earlier, gold has come under pressure. Gold is still around tomorrow level. Silver is a mild decline. The holding of gold ETFs is increasing for the past two days. With 0.2 per cent decline on MCX gold is trading below Rs 27,140.” 100McxTips Analysts said.
For latest commodity market tips, MCX tips, news & updates with 100McxTips, for latest updates follow us on Twitter @100mcxtips and Like on Facebook. And to contact the reporter on this story email at email@example.com or Call: +91-761-4012307