Gold nursed steep losses on Tuesday, trading well below a one-year high reached last week, as a rebound in global equities and the return of risk appetite dulled demand for the safe-haven asset.
* Spot gold held steady at $1,208.56 an ounce by 0042 GMT. The metal fell to a session low of $1,201.65 on Monday, before closing the day down 2.3 per cent.
* On Thursday, gold hit a year-high of $1,260.60 as concerns over the health of the banking sector and fears of a global slowdown prompted investors to stay clear of equities and buy safe-haven gold.
* But world stocks rose sharply on Monday as China’s central bank fixed the yuan at a much stronger rate and oil cemented recent gains, easing fears of global deflation.
* The dollar pulled away from multi-month lows against the yen and the euro.
* Top consumer China’s return from a week-long holiday did not help either. Chinese investors sold into gold’s rally, a sign they do not expect prices to go much higher and cannot be counted on to support the market, with post-Lunar New Year demand set to falter.
* A correction in gold prices had been expected as the metal had risen quickly over a short period of time. It gained $200 from its January lows to its year-high last week, when it also posted its best week since 2011.
* Further consolidation in the stock markets could see gold retrace more.
* Goldman Sachs said it expects lower gold prices, with a three-month target of $1,100 per ounce and 12-month target of $1,000.
* Among other precious metals, spot silver steadied after falling 2.4 percent on Monday. Platinum edged up 0.7 percent, while palladium was down 0.2 per cent.