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Gold down on concern about Europe, buoyant shares

Reuters  |  LONDON 

By Eric Onstad

(Reuters) - Gold drifted lower on Tuesday, weighed down by a firmer dollar on the back of concerns about instability in Europe, while a buoyant also sapped enthusiasm for bullion.

Spot gold was down 0.7 percent at $1,311.67 an ounce at 1345 GMT. Last week, prices touched their strongest since Sept. 15 at $1,325.86.

U.S. gold futures fell 0.6 percent to $1,312.50 an ounce.

The dollar hit a more than one-week high against a basket of other major currencies on Monday. It was up 0.2 percent on Tuesday, making commodities priced in the greenback more expensive for buyers using other currencies.

"The dollar has bounced back, partly due to weakness in the euro," said Jonathan Butler, at in

The euro is down due to concerns about upcoming Italian elections, problems forming a government in and lingering concerns about Brexit, he added.

"There's also the continuing rally in the equity markets. All of that has probably helped take the wind out of gold's sails," said.

Over the next few days, gold may extend losses to around $1,300 and the 100-day moving average around $1,290, he added.

Other analysts expect gold to bounce back.

Stephanie Aymes, at Societe Generale, said gold has been forming an and shoulder pattern, which is bullish.

"A clear move above $1,356 will mean confirmation of the formation and this will lead to next leg of up move towards $1,433/1,485 first," she said in a note.

Among other metals, spot silver fell 0.9 percent to $16.98 an ounce.

dropped 0.9 percent to $963.24 an ounce, after hitting a 3-1/2 month peak on Monday at $973.60.

Palladium was up 0.3 percent at $1,103.55 an ounce after touching a record high of $1,111.40.

"Now that we're above $1,100, there's the potential for profit taking - some of the longs are getting rather extended on Comex," said.

"But the speculative froth aside, we're still in a very strong fundamental market and those fundamentals should keep prices pretty well supported over the next few months."

(Additional reporting by in Bengaluru; Editing by and Louise Heavens)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 19:49 IST