Gold price falls to 1-month low, Tokyo pulls back from record
Gold extended losses to hit its weakest in more than a month on Tuesday as the Lunar New Year break in Asia curbed physical demand, while Tokyo bullion futures softened after hitting a record-high last week.
Investors were waiting for a meeting of G20 finance ministers and central bankers later this week which could set the tone for forex markets, especially the euro.
Gold struck a record of around $1,920 in September 2011, when a worsening debt crisis in Europe sparked a buying rush.
Gold hit a trough around $1,642 an ounce, its lowest since early January, and stood at $1,643.11 by 0242 GMT, down $4.54.
It ended up around 7 percent in 2012 - the 12th straight year of gains in one of the longest bull runs ever for a commodity.
"I think it's a little defensive at the moment," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo, referring to the slow trade during the Lunar New Year break. "But I personally feel that this is a bargain, this is cheap."
Booming demand for gold as a store of wealth among Asian investors has been driving physical gold bars and coins out of the United States and into Asia.
U.S. gold fell $5.20 to $1,643.90 an ounce on Tuesday.
Shares were steady in Asia but markets lacked momentum due to investor caution ahead of key events such as the U.S. president's State of the Union address. Markets reopened in Japan and South Korea,
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