Gold Dips In Asia On Mild Dollar Gains, China Holiday Demand Eyed
Investing.com - Gold dipped in Asia on Tuesday with a slightly stronger dollar noted, but support seen from physical demand in China ahead of the Lunar New Year holidays.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange fell 0.05% to $1,325.80 a troy ounce.
In Japan, producer prices showed a 0.3% gain on month, beating the 0.2% rise seen and a 2.7% rise on year as expected. The US dollar index rose 0.03% to 90.04.
Overnight, gold prices rose sharply on dollar weakness. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal.
The biggest demand for gold is for use in gold jewellery which accounts for roughly 50% of total demand, according to the World Gold Council.
The rebound in gold prices comes in the wake of a second straight week of losses, however, market participants expect upward momentum to be short lived somewhat as strong US consumer inflation data due Wednesday could stoke expectations for a faster pace of Federal Reserve rate increases.
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