adminSINGAPORE — Gold slipped yesterday as the dollar firmed after minutes from a US Federal Reserve policy meeting indicated support for continued tapering of its stimulus.
The tapering, which highlights a recovery in the US economy, will diminish gold’s investment appeal as a hedge against inflation. The metal sank to a six-month low on December 31 on prospects for a global economic recovery.
Gold hit an intraday high of US$1 314,50 before slipping to US$1 309,85 by 3,32am GMT, down US$1,40. It crossed the psychological level of US$1 300 in February, but gains have been capped at a three-and-a-half-month high of US$1 332,10 hit on Tuesday.
“It’s still range-bound for gold. It’s broken a few tiers but at the moment, it’s still capped within US$1 330,” GoldSilver Central MD Brian Lan said in Singapore.
“What we can see is that it should correct a little because the rise has been too sharp,” said Mr Lan, who pegged key support at US$1 305 an ounce.
But dealers expected jewellers to buy on dips while India’s plan to keep tax on gold imports at current levels could underpin sentiment in the physical market as it will lead to more smuggling.
Gold demand in India is expected to be robust in 2014 and likely to encourage an increase in smuggling if curbs on bullion imports remain, the World Gold Council has said.
US gold fell US$10,50 to US$1 309,90 an ounce. — Reuters
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