Gold holds under its three-week high pointGold stayed below its highest level in three weeks as tensions in the Middle East and Ukraine failed to hold down investor enthusiasm for global equities, damping demand for the metal as an alternative investment.
Gold for immediate delivery fell as much as 0.2 percent to $1,305.77 an ounce and traded at $1,308.76 by 2:29 p.m. yesterday in Singapore. Approval of U.S. airstrikes in Iraq sent the metal on Aug. 8 to $1,322.76, the highest since July 18. Prices have since retreated on decreasing haven demand.
Geopolitical risks in Ukraine, Iraq and Gaza helped gold rebound this year after prices declined 28 percent in 2013 on speculation the Federal Reserve would cut its bond-buying stimulus program. A gauge of global equities rallied the most since April on Monday on the optimism the conflict in Ukraine would ease and U.S. air strikes in Iraq would push back militants.
A truce in Gaza between Israeli forces and Hamas fighters held as parties returned to talks in Cairo.
“Gold edged lower as geopolitical risks eased,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Bullion is weighed down by risk-on appetite as global equities rally.”
Gold for December delivery traded at $1,309.90 an ounce on the Comex in New York, from $1,310.50 Monday. Holdings in the SPDR Gold Trust were unchanged yesterday after dropping last week below the level at which they ended 2013.
U.S. Federal Reserve Vice Chairman Stanley Fischer said earlier this week that sluggish labor-supply growth is a “source of concern” because it may contribute to a slowdown in longer-run output of the U.S. economy.
Silver for immediate delivery traded at $20.035 an ounce from $20.0186. Spot platinum was at $1,470.56 an ounce from $1,469.88. Palladium fell 0.2 percent to $874.34 an ounce.