(Bloomberg) -- Gold was little changed in Asia amid speculation that food and commodity costs will accelerate, potentially boosting the appeal of the metal as a hedge against inflation.
Corn traded near a nine-month high and soybeans near the highest in 34 years on speculation that U.S. demand for fuel made from grain and oilseeds will surge. Wheat rose above $10 a bushel yesterday for the first time. Some investors buy gold, which fell in the past three days, to hedge against rising consumer prices.
``Inflation concerns and some physical demand limited further downside,'' said Wang Xinyou, senior gold analyst at Agricultural Bank of China. ``The strength in the dollar also capped gold on the upside.''
The precious metal traded at $792.32 an ounce at 10:09 a.m. Singapore time, after closing at $793.35 an ounce yesterday in New York. Silver was also little changed at $13.82 an ounce.
The dollar traded at $1.4392 per euro at 10:11 a.m. in Singapore from $1.44 yesterday when it touched $1.4331, the strongest since Oct. 26. Gold often moves in the opposite direction to the U.S. currency.
``With dollar strength apparently becoming somewhat entrenched, at least in the near term, gold may head toward our long-standing one-month forecast of $750 an ounce although important support at $772 to $773 needs to break for that to occur,'' John Reade, precious metals analyst at UBS AG said in a report yesterday.
February-delivery gold on the Comex division of the New York Mercantile Exchange fell 0.5 percent to $795 an ounce in after- hours trading at 10:14 a.m. Singapore time.
In Japan, the most active gold futures contract was little changed at 2,908 yen a gram ($800 an ounce) on the Tokyo Commodity Exchange at the 11 a.m. local time break.
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