LONDON (Thomson Financial) - Gold rebounded slightly midafternoon as the dollar weakened once more against the euro, but remained in negative territory as further losses on Wall Street fuelled risk aversion among investors.
A higher opening on the US stock market, which helped ease fears of a further slide in share prices, briefly benefited the precious metal, helping it rally to a high of 666.90 usd per ounce.
But a dip in share values after initial trades helped the metal ease back to 664.93 usd an ounce by 3.10 pm, against 667.20 usd in late New York trade yesterday.
The precious metal dipped sharply overnight and in early trade after US stocks slid more than 150 points yesterday on fears surrounding the fallout from the sub-prime mortgage sector, leading Asian and European shares lower.
Gold continued to languish as risk-averse investors pulled out of bullion in favour of 'safer' assets such as bonds and currencies. This benefited the dollar, which strengthened against the major currencies, further denting gold.
'As money piled into US treasuries, the dollar bounced from the cascade it was suffering (earlier in the year),' said James Steel, an analyst at HSBC. 'That is what really clipped gold.'
The dollar softened however after indications that the crucial US jobs report due Friday will come in weak.
In data out this afternoon, the ADP national employment report showed US companies added 48,000 jobs in July, far lower than the 100,000 expected by analysts.
The report dented the dollar, which had otherwise previously performed strongly amid safe haven buying against a backdrop of rising risk aversion across the board.
Gold's rally pulled silver with it, with the metal coming off lows to trade at 12.95 usd against 12.96 usd.
Among other precious metals, platinum dipped to 1,282 usd from 1,289 usd, while palladium slipped to 359 usd from 364 usd.
Both the platinum group metals have been adversely affected by news last week that Nissan has developed technology that will cut the use of PGMs in catalytic converters, currently a key market for the metals. jan.harvey@thomson.com har/slm COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
A higher opening on the US stock market, which helped ease fears of a further slide in share prices, briefly benefited the precious metal, helping it rally to a high of 666.90 usd per ounce.
But a dip in share values after initial trades helped the metal ease back to 664.93 usd an ounce by 3.10 pm, against 667.20 usd in late New York trade yesterday.
The precious metal dipped sharply overnight and in early trade after US stocks slid more than 150 points yesterday on fears surrounding the fallout from the sub-prime mortgage sector, leading Asian and European shares lower.
Gold continued to languish as risk-averse investors pulled out of bullion in favour of 'safer' assets such as bonds and currencies. This benefited the dollar, which strengthened against the major currencies, further denting gold.
'As money piled into US treasuries, the dollar bounced from the cascade it was suffering (earlier in the year),' said James Steel, an analyst at HSBC. 'That is what really clipped gold.'
The dollar softened however after indications that the crucial US jobs report due Friday will come in weak.
In data out this afternoon, the ADP national employment report showed US companies added 48,000 jobs in July, far lower than the 100,000 expected by analysts.
The report dented the dollar, which had otherwise previously performed strongly amid safe haven buying against a backdrop of rising risk aversion across the board.
Gold's rally pulled silver with it, with the metal coming off lows to trade at 12.95 usd against 12.96 usd.
Among other precious metals, platinum dipped to 1,282 usd from 1,289 usd, while palladium slipped to 359 usd from 364 usd.
Both the platinum group metals have been adversely affected by news last week that Nissan has developed technology that will cut the use of PGMs in catalytic converters, currently a key market for the metals. jan.harvey@thomson.com har/slm COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.