Gold Slips From 1-1/2-Week Top as Equities, Oil Recover

Gold dropped early on Thursday in Asia, slipping from a 1-1/2-week high, as battered stocks bounced back along with U.S. crude.

Spot gold was off 0.2 percent at $ 1,099.40 an ounce by 0039 GMT, after touching $ 1,109.20 on Wednesday, its highest since Jan. 8.

U.S. gold for February delivery slipped 0.6 percent to $ 1,099.60 an ounce.

Bullion has benefited from the risk-averse sentiment that has dragged equities and oil to multi-year lows and pushed investors towards assets deemed as safe havens.

Still, the metal has found resistance around $ 1,100 as the threat of further U.S. interest rate increases and a stronger U.S. dollar suggest limited upside potential.

But expectations of another U.S. interest rate hike in March diminished after consumer prices unexpectedly fell in December as the cost of energy products and food declined, offering signs of weak inflation.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose to 660.30 tonnes on Wednesday from 657.92 tonnes on Tuesday.

Source: Reuters