Gold Slips As Syria Fears Calm

FRANKFURT (Sept 10)  Gold futures slipped in the mid electronic trades today on hopes that a military strike in Syria could be averted. Weakness in oil and other commodities also weighed on yellow metal.

International oil futures extended losses as a non-military proposal to calm tensions over Syria emerged. Crude oil for October delivery fell 81 cents at $108.70 a barrel.

December silver futures also tumbled by $0.32 at $ 23.395 per ounce after rallying nearly 20% to above $25 an ounce in month of August.

An ounce of gold on Comex division of New York Mercantile Exchange is trading down $7.1 at 1379.6. Yesterday, it ended up 20 cents to settle at $1,386.70 an ounce.

In the late August gold prices surged to a three-and-a-half month high of $1,434 a troy ounce as safe-haven buying picked up amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.

On the data front, the Chinese economic data released Tuesday showed a stronger-than-anticipated picture for the industrial and retail sectors, sending stocks higher. Industrial production rose 10.4% from a year earlier, accelerating from July's 9.7% advance.

Retail sales increased by 13.4% compared to August last year. Urban fixed-asset investment, a measure of construction activity, was up 20.3% in the January-August period, improving from a 20.1% rise in January-July.

In currencies, the U.S. dollar moved sideways with the market holding on to expectations for a reduction of Federal Reserve stimulus next week. Late Tuesday morning in East Asia, the ICE dollar index which measures the dollar against a basket of six other currencies, sat at 81.791, identical to its level late Monday in North America.

MCX October gold futures tumbled below Rs 31500, trading down nearly Rs 150 per 10 grams today. It fell to the session low of Rs 31170.