Gold retreats as higher prices dampen demand
NEW YORK (Aug 13) Gold slowed its fourth day of advances in a row on Tuesday, after the highest prices in almost three weeks muted investors' sentiment. Gold prices rose more than 4% through Monday, touching $1,345, levels unseen since the end of July.
Gold futures were seen 0.29% lower to $1,330.40 an ounce at the time of writing, while silver erased losses and gained 1.01% to $21.560 an ounce.
The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies, inched up 0.20% to 81.493 at the time of writing.
Holdings in SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, remained unchanged at 911.13 tons on Monday. Holdings in the trust rose on August 9 for the first time since early June. The volume of holdings fell under 1,000 tons in June for the first time in more than four years.
Gold prices pared some gains and rebounded from a 34-month low on June 28. In the first half of the year, when gold lost around one quarter of its value, consumption in China, the second-largest bullion consumer, rose 54%. This physical buying from Asia supported bullion and prevented prices from falling further.
Fed's tapering in focus
Investors continue to be concerned about the future of the Federal Reserve (Fed) bond-buying program as several bank officials signaled last week that the central bank may start tapering its stimulus by the end of the year.
Markets are closely watching for US economic data, which may provide hints as to when the Fed is likely to start reducing its monetary easing measures as weak data could prompt the central bank to remain on hold.
