Gold was little changed in Asia after energy prices declined from a record and the euro eased against the dollar, eroding the precious metal's appeal as a hedge against inflation.
Interest in the precious metal as an alternative asset waned as crude-oil futures fell from a record $119.90 a barrel reached on April 22 and the euro traded below $1.60. Gold climbed to a record $1,032.70 on March 17, when crude and the euro set previous records.
``Gold hasn't been able to sustain a rally even in the face of record oil prices and a record-low dollar,'' Wang Xinyou, senior gold analyst at Agricultural Bank of China, said by phone from Beijing today. ``Gold may remain pressured when those two decline, especially as concerns over the credit crisis seem to be gradually diminishing.''
UBS AG said yesterday gold will sell for $850 an ounce in three months, down from a previous forecast of $1,000.
Bullion for immediate delivery was virtually unchanged at $904.20 an ounce at 9:38 a.m. in Singapore. The precious metal fell below $900 yesterday to $897.67 an ounce. Silver was up 0.2 percent to $17.18 an ounce.
Crude oil fell for the second day to trade at $117.90 a barrel at 9:39 a.m. in Singapore. The euro also fell for the second day against the dollar to $1.5859.
The weakness of the dollar in previous days ``provided some support for gold, but failed to stimulate the metal price movement,'' said Peter Fertig, consultant at Dresdner Kleinwort, in a report yesterday. Gains in the stock markets ``might weigh on gold'' as well, he added.
Gold for June delivery was little changed at $906.70 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange at 9:18 a.m. Singapore time.
Gold for February 2009 delivery fell 1.5 percent to 3,028 yen a gram ($911 an ounce) at 10:19 a.m. local time on the Tokyo Commodity Exchange.
Courtesy : Bloomberg.com
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