Gold price slips as investors pile into equities

London (Sept 12)  Gold fell to its lowest in more than a week on Tuesday as easing concerns over North Korea's nuclear ambitions and the impact of Hurricane Irma tempered demand for the metal as a haven from risk while the dollar strengthened.

World stocks hit record highs for a second straight day on Tuesday as investors opted for nominally higher risk-assets over
havens such as gold, bonds and the Japanese yen.           

Spot gold hit its lowest since Sept. 1 at $1,322.15 an ounce in early trade and was at $1,324.17 at 1120 GMT, down 0.2 percent. On Monday it slid 1.4 percent in its biggest one-day drop in two months.

"The North Korea story has had (an impact) on the price of gold, but these geopolitical events tend to be quite limited in time," Natixis analyst Bernard Dahdah said. "The market accommodates surprisingly quickly when things calm down."

"It was the weakness of the dollar that was really driving gold, and the tensions with North Korea," he said. "The rate at which the dollar can still depreciate is slowing down."

U.S. gold futures for December delivery were down
$7.50 an ounce at $1,328.20.
    The dollar was up 0.1 percent, extending the previous
session's bounce from last week's 2-1/2 year low. European
stocks          rose on Tuesday, and world shares hit another
record high.           
    "North Korean inaction over the weekend took some heat out
of the crisis, with investors becoming a little bit more
comfortable," ANZ said in a note. "Hurricane Irma also caused
less damage than original feared."
    "The market is likely to turn its attention to the Fed, with
speakers now in blackout mode ahead of its policy meeting next
week."
    The Federal Reserve has raised U.S. interest rates twice
this year in response to upbeat growth data and falling
unemployment, but persistently soft inflation data has tempered
expectations for another hike in December.             
    Gold is highly sensitive to rising U.S. interest rates, as
they increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares      , rose 1.2 tonnes on Monday, data
from the fund showed, after three days of outflows.            
    Among other precious metals, silver        was down 0.2
percent at $17.77 an ounce after hitting its lowest since Sept.
1 at $17.67.

Platinum  was down 0.7 percent at $982.70, while
palladium was 0.8 percent higher at $939.80 an ounce.

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