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Gold hits one month low on dollar, oil changes
Gold hit one-month lows Tuesday on a firmer dollar, weaker oil and faltering demand, but bargain hunting limited further losses.
Gold was quoted at US$814.20/815.60 an ounce at 10:32 GMT, down from $819.35 an ounce in New York late on Monday, but off a one-month low of $813.80 an ounce.
Gold prices have fallen around 6 percent so far in January, after rising 8 percent in December.
"The market has rallied up quite a lot in the last fortnight," Eugen Weinberg, a commodity analyst at Commerzbank said. "We had short-covering... index funds talking about re-weighting things and people got excited.
"Now we are back to reality where there is no demand and the market is drifting. We are coming back to where we should be in the first place."
The dollar was broadly firm, hitting one-month highs against the euro, as struggling equity markets cranked up demand ahead of a European Central Bank policy meeting on Thursday.
Adding to the underlying negative sentiment, US crude CLc1 fell toward $36 a barrel to its lowest level in three weeks as further signs the world economy was slowing dampened demand expectations.
A stronger dollar tends to pressure gold, which is often bought as an alternative asset to the US currency, while weaker oil prices reduce gold's appeal as a hedge against inflation.
Gold's losses were limited by buying interest from jewelers in Asia ahead of the Lunar New Year holidays later this month, dealers said.
In Vietnam, gold also posted a sharp fall Tuesday. The yellow metal’s price at the Saigon Jewelry Joint Stock Company, the country’s largest gold trader, slumped VND330,000 to VND17.49 million a tael ($1,000), or $834 an ounce.
ThanhNien, Reuters
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