September 28, 2016
Gold Hits One-Week Low as Dollar Firms
(Reuters) - Gold inched lower on Wednesday to touch a one-week low, after suffering its biggest single-day loss in nearly a month in the previous session, on a firmer dollar.
The safe haven asset slid nearly 1 percent on Tuesday, its biggest single session percentage loss since Aug. 30, as investors viewed that Democrat Hillary Clinton had won the first U.S. president debate against Republican rival Donald Trump, boosting the appetite for riskier assets like equities.
Spot gold fell 0.2 percent to $1,324.71 an ounce by 0430 GMT on Wednesday, and touched a bottom of $1,324.35, the lowest since Sept. 21.
U.S. gold futures eased 0.1 percent to $1,328.50 an ounce.
"Demand for gold as a safe haven has fallen, simply because Hillary has more or less trumped over Trump in the presidential debate," said OCBC Bank analyst Barnabas Gan.
"Falling gold prices suggest that market watchers look at Hillary as a safer bet than Trump."
Markets have tended to see Clinton as the candidate of the status quo, while few are sure what a Trump presidency might mean for U.S. foreign policy, trade or the domestic economy.
"The rise in risk-off sentiment has undermined (gold) prices. This is made worse by the fall in yields and U.S. dollar gains," HSBC analyst James Steel said in a note.
"We think gold may be driven lower near-term to closer to $1,310 per ounce," Steel added.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.14 percent on Wednesday. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Gold can move further to the downside in the coming days with key support at the 100 day moving average of about $1,310, according to MKS trader James Gardiner.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22 percent to 949.14 tonnes on Tuesday.
Among other precious metals, spot silver was down for the fourth straight session having dipped 0.6 percent at $19.03 an ounce. The metal fell 1.4 percent in the previous session, its biggest single day loss in nearly three weeks.
Platinum was up 0.2 percent at $1,024.40 after falling over 1 percent in the prior session.
Palladium gained 0.4 percent to $700.60 per ounce.