Gold price near 4-month low as stronger equities curb demand
Gold was flat at USD 1,244.55 an ounce. The five-day decline before Tuesday is the metal`s longest losing streak in nearly seven months.
Singapore: Gold steadied on Tuesday after a five-day losing streak but was still trading near its lowest level in four months as stronger equities dented the metal`s investment-hedge appeal.
Weak demand in top consumer China also weighed on investor sentiment, with buying interest failing to come back strongly after the Dragon Boat festival on Monday.
Spot gold was flat at USD 1,244.55 an ounce by 0241 GMT. The five-day decline before Tuesday is the metal`s longest losing streak in nearly seven months.
Asian shares edged higher, supported by strong global economic data, while the dollar index hovered near its highest since Feb. 13.
Gold is often seen as an investment alternative to riskier assets such as stocks.
"Over the past week investors have turned more positive in the outlook for the global economy and for a peaceful resolution to the Ukrainian crisis, with more industrially sensitive commodities like silver and nickel seeing strong inflows and gold seeing outflows," ETF Securities said in an emailed note.
Gold-backed exchange-traded products run by the firm saw outflows of USD 52 million last week - the biggest since March, it said.
Data on Monday showed that U.S. and China manufacturing activity expanded in May, putting the world`s two largest economies on a seemingly firmer path to recovery, but a slowdown in euro zone factory growth boosted expectations of policy easing by the European Central Bank.
"We suspect that gold will likely push lower over the course of June and we are looking at the $1,210 level as being the next support," INTL FCStone analyst Edward Meir said.
Investors were hoping that Chinese demand would support prices, expecting retailers and banks to be in the market again for bullion after the Dragon Boat festival holiday.
However, prices for 99.99 percent purity gold on the Shanghai Gold Exchange eased on Tuesday. Premiums to the global benchmark failed to budge on Tuesday, remaining at about USD 3 an ounce - the same level as Friday`s.
"There is no special interest from Shanghai today, in fact we see some small liquidation," said a trader in Hong Kong. "This indicates that consumer demand over the long weekend was not good."
Among other precious metals, platinum and palladium edged higher on Tuesday as wage strikes in major producer South Africa dragged on for a fifth month.
A South African labour court threw out an urgent application on Monday by the AMCU union to stop platinum firms communicating directly with miners, as both sides deliberated over government proposals to end the strike.