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PRECIOUS-Gold edges lower, decline in stock markets limits losses

Published 14/01/2016, 05:47 pm
© Reuters.  PRECIOUS-Gold edges lower, decline in stock markets limits losses
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* Gold dips after last session's gain of 0.6 pct

* Focus on falling equity markets, currencies (Updates prices)

By Naveen Thukral

SINGAPORE, Jan 14 (Reuters) - Gold edged lower on Thursday as the market paused after last session's 0.6-percent gain, which was triggered by falling global equity markets and weakness in the U.S. dollar.

Asian shares fell in the wake of steep losses on Wall Street, as Brent oil skidded to 12-year lows amid a commodities rout that heightened fears about the global economy. MKTS/GLOB

"It is a bit of profit-taking at the moment," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The focus is on equity markets and currencies, Dow was down and we are seeing further pressure on Asian stock markets."

Spot gold XAU= had fallen 0.2 percent to $1,091.46 an ounce by 0639 GMT, while U.S. gold futures GCcv1 gained 0.4 percent to $1,091.6.

U.S. stocks sank on Wednesday, pushing the S&P 500 to a close below 1,900 for the first time since September as investors grew anxious about weak energy prices, U.S. corporate earnings and the global economy. .N

Sentiment soured for the greenback, which retreated from a one-week high against a basket of major currencies as U.S. stocks fell. USD/

The deepening slide in oil and concerns about China's economy have rattled equity markets, which have failed to sustain any significant rallies in early 2016.

Chicago Federal Reserve Bank President Charles Evans said he was nervous about the potential effects of China's slowdown on the U.S. economy and about the possibility that inflation expectations may be slipping.

The Fed raised U.S. interest rates in December and attention has shifted to how many increases will follow in 2016. Rate hikes typically lower demand for non-interest-paying gold while boosting the dollar.

Among other precious metals, palladium XPD= gave up 0.5 percent to $482.8 an ounce, silver XAG= lost 0.6 percent to $14.06 an ounce, while platinum XPT= fell 0.2 percent to $845.35.

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