0
LONDON/SINGAPORE: Gold fell on Wednesday, tracking industrial metals and equities lower, as concerns about global economic growth and Iran's threat to stop the flow of oil kept investors on the sidelines.
Latest data out of the United States sent mixed signals on the health of the world's largest economy. Improving labour market conditions lifted consumer confidence to an eight-month high in December, but persistently weak house prices remain an obstacle to faster economic growth.
Spot gold was down 0.5 per cent at $1,585.70 an ounce by 0933 GMT, on course for a third consecutive session of losses. US gold fell 0.6 per cent to $1,586.40.
Iran's threat put world shares on the back foot, and industrial metals eased in thin holiday trade.
“Gold is still tightly correlated with equities markets, but also risk aversion is not at the levels we saw in early August when gold de-coupled from everything else and traded with the dollar,” VTB Capital analyst Andrey Kryuchenkov said
“It's more uncertainty than outright panic selling,” he added.
Although gold traditionally has a safe-haven appeal, the euro zone debt crisis is threatening the global economy, causing a liquidity shortage in markets and forcing investors to abandon their gold positions to cover losses elsewhere.
The dollar was almost flat against a basket of currencies, with the euro hovering around an 11-month low against the US currency.
A stronger dollar often encourages non-US holders of gold to sell the metal to lock in a higher profit in their own currencies.
Technical analysis suggested that spot gold could fall to $1,569 during the day, Reuters market analyst Wang Tao said.
