Gold weakens as Syria threat eases, loss of safe-haven appeal

Isa Bullion - Gold weakens as Syria threat eases, loss of safe-haven appeal

Analysts said that gold seems to have priced in a Fed's tapering in September.The gold futures have fallen 2.30 percent this month and 18.62 percent this year.

LONDON:US Gold futures weakened as it seemed to be losing its safe haven appeal as a threat of US military stirke against Syria has lessened and December futures at Comex fell to a low of $1356.85 an ounce.

Analysts said that gold seems to have priced in a Fed's tapering in September.The gold futures have fallen 2.30 percent this month and 18.62 percent this year. The CRB Commodities Index fell 1.11 percent and the crude oil futures plunged 2.84 percent during the past two days as the prospects of a diplomatic solution to the Syrian problem have risen. The S&P 500 Index rose 1.74 percent this week after rising 1.36 percent last week while the Euro Stoxx 50 Index jumped 1.71 percent after surging 3.02 percent last week. The Dollar Index fell 0.40 percent this week to end at 81.821 on Tuesday while the U.S. 10-year government bond yield settled at 2.9681 percent after breaching 3 percent during Asian trading on 6 September.

Gold, which has fallen more than 18 percent this year, is also being hurt by expectations the U.S. Federal Reserve will opt to taper its monetary stimulus programme after the Fed's Open Market Committee meeting on Sept. 17-18.

The imminent threat of a Syrian war has receded as the U.S. senators are evaluating the Russian proposal to Syria to remove its chemical weapons. Investors have resumed selling their gold-backed ETFs in September after the stabilization in late August. Gold speculators have increased their combined net positions four weeks in a row to 101,396 contracts according to the CFTC. The Comex gold inventories have plunged 36 percent this year when physical demand for gold and physical delivery have increased in response to the plummeting prices in April and June. Nevertheless, the upcoming FOMC meeting and the U.S. economic data remain the larger factors on the direction of gold prices. 

courtesy of bullionstreet