Gold falls with euro as dollar strength weakens safe-haven demand

Singapore (Jan 5)  Gold slipped for a third session out of four on Monday as the U.S. dollar surged against major currencies, with the euro tumbling to its lowest since 2006, dulling the metal's appeal as a hedge.

FUNDAMENTALS
 * Spot gold had eased 0.2 percent to $1,186.10 an ounce by 0029 GMT.
 * The metal tumbled to a one-month low of $1,168.25 on Friday, before recovering to close up 0.6 percent on weak U.S. manufacturing data. Weak economic data triggers demand for gold, seen as a safe-haven asset.
* But gold was unable to build on those gains on Monday as the euro tumbled to its lowest since 2006, sending the U.S. dollar flying higher against a range of competitors.
* The dollar also surged against the Swiss franc and sterling, extending a recent bull run as markets wagered a relatively healthy U.S. economy will lead the Federal Reserve to raise rates sooner than other major central banks.
* A stronger greenback makes dollar-denominated gold more
expensive for holders of other currencies. It also decreases the
metal's appeal as a hedge.
    * Bullion traders were also eyeing moves in oil prices for
cues as gold is seen as hedge against oil-led inflation.
    * U.S. crude futures extended declines to a third day on
Monday to stay near their lowest level in more than five years,
hurt by a slew of weak economic data in the world's biggest oil
consumer.
    * In news from the physical markets, U.S. Mint sales of
American Eagle gold coin sales fell 70 percent over the previous
month in December, and total gold coin sales for 2014 fell 39
percent over the previous year.   

Source: Reuters