LONDON: Gold fell towards $1,100 an ounce in Europe on Thursday as the dollar rose against the euro in volatile trade after data showed the US trade deficit narrowed in January.
Palladium slid nearly 3.5 percent, meanwhile, and platinum and silver fell after a rise in Chinese inflation data to 16-month highs fuelled expectations the Asian nation may move to curb growth, knocking industrial commodities.
Spot gold fell as low as $1,100.04 an ounce and was bid at $1,104.55 an ounce at 1425 GMT, against $1,107.85 late in New York on Wednesday.
US gold futures for April delivery on the COMEX division of the New York Mercantile Exchange fell $3.40 cents to $1,104.70.
Prices were lifted as the euro softened against the dollar. Strength in the US unit curbs gold’s appeal as an alternative asset and makes dollar-priced commodities more expensive for other currency holders.
“Gold is struggling because we have a stronger dollar, and there has been very little inflow into exchange-traded funds,” said Deutsche Bank’s head of commodity research Michael Lewis.
Data showed holdings of the world’s largest gold-backed ETF, New York’s SPDR Gold Trust, fell by 0.609 tonnes on Wednesday, almost the same amount by which they rose at the end of last week.
Copper traded flat on Thursday as production and inflation data from China stoked concerns of monetary tightening from the world’s top metals consumer, while falling inventories supported.
At 1456 GMT, copper for three-month delivery on the London Metal Exchange was at $7,449 a tonne from $7,440 at the close on Wednesday and compared with a session low at $7,356. Chinese consumer inflation spurted to a 16-month high in February, giving potential grounds for tightening policy sooner rather than later. reuters
