Gold ended the day almost unchanged on Monday, taking a breather after dropping the most in a month in the previous session, as markets digested a decision by Standard & Poor's to revise the sovereign credit outlook for the United States to stable from negative.
Bullion's reaction to the announcement by the credit rating agency was largely muted. In August 2011, S&P downgraded the sovereign U.S. credit rating from top-rated AAA to AA-plus, heightening economic uncertainty that helped lift gold to a record high $1,920 a month later.
On Monday, analysts said the news could further weigh on gold's safe-haven appeal against a backdrop of an already improving U.S. economy and the absence of any inflation threat.
"We continue to see rotation into the stock market as fear continues to leave the marketplace,'' said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.
"I don't even think a 10-15 percent retracement in the stock market is enough to shake people out and back into the metals for the long term," McGhee said.
Spot gold was last up 0.2 percent at $1,386 an ounce, off a near two-week low of $1,375.99 hit earlier in the session.
U.S. gold futures edged up $3.00 at $1,386 per ounce, with trading volume on track to finish sharply below its 30-day average, preliminary Reuters data showed.
(Read More: Gold Going Above $1,488, Says Former Gold Bear)
Gold fell around 2 percent on Friday, its biggest one-day drop in over three weeks, as funds dumped bullion after resilient U.S. jobs data suggested the Federal Reserve could begin to scale back its monetary stimulus later this year.
(Read More: Pro: This Will Determine Gold's Next Move)
Investors seemed marginally less wary of gold, however.
Outflows from gold-backed exchange-traded funds slowed, with the world's largest gold ETF, the SPDR Gold Trust, reporting an outflow of six tons last week, compared with an average 24 tons a week over the previous two months.
Indian Gold Demand Muted
Gold demand in India, the world's largest bullion consumer, was weak on Monday, traders said, hurt by seasonal slackness and efforts by the government to curb bullion imports.
India's government raised the import duty on gold to 8 percent last week, after a ban on consignment imports by banks, state-run and premier trading houses. One finance ministry official said on Monday it could consider more fiscal measures to cut gold imports if they do not fall to the desired level.
Among other precious metals, silver was up 1.4 percent at almost $22 an ounce.Spot platinum inched up 0.5 percent to $1,504 an ounce and spot palladiumrose 1.4 percent to $766 an ounce.
No comments:
Post a Comment