Gold steadies off 2-1/2 week lowComment on this story
London - Gold steadied near $1,290 an ounce on Tuesday after falling for three straight days, as a retreat in the dollar took some pressure off the metal, though continued outflows from physical gold funds curbed potential for gains.
Prices on Monday fell to their lowest since early April at $1,281.40 an ounce, after peaking above $1,330 a week before on concerns that the stand-off between the West and Russia over Ukraine could escalate.
Spot gold was at $1,290.40 an ounce at 11:46 SA time, little changed from $1,289.54 late on Monday.
US gold futures for June delivery were up $2.10 an ounce at $1,290.60.
“Gold continues to suffer from small-scale profit taking on the back of the early April price rebound,” VTB Capital analyst Andrey Kryuchenkov said.
“It should consolidate above early April lows, with decent support around 1278-80.”
Investors are awaiting the next round of economic data at the start of May before taking up positions once again, he added.
“The physical side will remain quiet for now, with all attention on the dollar,” he said.
The dollar drifted down 0.1 percent against a basket of currencies in early trade, surrendering gains that earlier took it to a three-week high.
A softer dollar tends to benefit gold, which is priced in the currency.
On the investment side of the market, the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported another drop in holdings on Monday, of 3 tonnes to 792.14 tonnes.
Last week alone, outflows from the fund totalled 9.3 tonnes, erasing all the gains made in the year.
Traders said persistent outflows from the top ETF could affect market sentiment and make any gains difficult to hold.
ASIAN DEMAND SOFT
Demand was soft overnight in Asia, precious metals house MKS said in a note on Tuesday, a day after gold's discount to spot prices on the Shanghai Gold Exchange widened to $6 an ounce.
“Shanghai were sellers once again with the Shanghai Gold Exchange (arbitrage) remaining in discount and drawing out sellers,” it said.
“Any unfavourable developments between Russia and Ukraine still have the potential to propel gold and silver higher as safe-havens are sought, but with headlines on this front diminishing and tensions seeming to ease, the metals look to remain heavy in the short term.”
US Vice President Joe Biden told Ukrainian presidential candidates and members of parliament on Tuesday that Washington was ready to help Ukraine's economy but warned them they must fight endemic corruption.
Biden's visit to Ukraine follows the signing in Geneva last Thursday of a four-way peace deal to reduce tension in eastern Ukraine where pro-Russian separatists have seized towns and key facilities.
Kiev says the rebellions in the east are inspired and directed by Russia, which annexed Crimea in March.
Among other precious metals, silver was up 0.3 percent at $19.45 an ounce.
Spot platinum was up 1.1 percent at $1,407.24 an ounce, while spot palladium was up 0.8 percent at $783.50 an ounce.
Chief executives of the world's top platinum producers were to meet the leaders of the AMCU union on Tuesday for wage talks in a bid to find an agreement to end the longest and most costly strike at South Africa's mines in living memory.
Around 70,000 members of the Association of Mineworkers and Construction Union (AMCU) downed tools 13 weeks ago at Anglo American Platinum, Impala Platinum and Lonmin. - Reuters