Gold slips after buoyant performance last week

Bengaluru — Gold fell on Monday, retreating from last week’s two-and-a-half-month peak as rallying global stock markets pointed to improved investor appetite for risk.

Spot gold was down 0.2% at $1,223.74 an ounce at 10.42am GMT, having hit a two-and-a-half-month high last week at $1,233.26 per ounce. US gold futures fell 0.2% at $1,226.60 an ounce.

European shares gained ground after Moody’s kept Italy’s sovereign rating intact, with the market also taking cues from rallies in Asia, after China’s promise to provide stimulus to stabilise its economy and offset the effects of US tariffs.

However, losses for gold were limited, with a weakening dollar and prices still hovering around the 100-day moving average, around $1,224, a key technical level, analysts said.

“We are still in a lateral phase between $1,220 and $1,230. I wouldn’t be worried about the low correction this morning as long as it is keeping positive momentum,” ActivTrades chief analyst Carlo Alberto De Casa said.

Geo-political concerns, including tensions between Saudi Arabia and the West over the killing of journalist Jamal Khashoggi, and developments related to Brexit were seen keeping some investors favourably disposed towards gold.

“We saw a significant amount of short covering from speculators last week. With quite a bit of uncertainty, we could see that trend moving forward,” said ING analyst Warren Patterson.

Indicative of the prevailing sentiment in the bullion market, gold speculators cut their net short position in Comex gold contracts by 65,637 contracts to 37,372 contracts, the smallest since late July, in the week to October 16, data showed.

Among other precious metals, silver was up 0.3% at $14.64 per ounce, while platinum was down 0.1% at $829.5.

Palladium climbed 0.8% to $1,089.0 per ounce. 

Reuters