Wednesday, 13 January 2016

Gold falls as stocks rebound in Europe, dollar rises

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Gold fell for a third straight session on Tuesday as a rebound in European and U.S. stock markets undermined the metal's appeal as a haven from risk, and as the dollar strengthened against a basket of currencies.

Spot gold was down 0.3 percent at $1,090.30 an ounce at 2:39 p.m. EST (1939 GMT), while U.S. gold futures for February delivery settled down 1 percent at $1,085.20 an ounce.

The metal pared losses as U.S. and European shares came off their highs when depressed oil prices failed to sustain a rally, while the U.S. dollar rose for the third straight session. The rise in stocks suggested risk appetite is recovering after last week's rout.

"(We're) looking for gold to perhaps get down to the $1,055-1,060 level as we expect a bounce in the equity markets to continue on account of earnings that likely will be no worse than estimates, stabilizing macro readings from a number of countries, including China ... and a possible jump in oil," said INTL FCStone analyst Edward Meir.

The metal's early January rise ran out of steam late last week after prices hit resistance at their 100-day moving average. Gains have been capped by concerns over higher U.S. interest rates. Since the U.S. Federal Reserve raised rates in December, attention has shifted to how many hikes will follow in 2016.

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