Bullion typically moves inversely to the dollar and gained 1.4 percent on Aug. 21 as a decline in the Dollar Index, a six- currency gauge of the greenback’s value, increased the metal’s appeal as a hedge against inflation. The Index, along with rising stocks, may provide support to gold, said Hwang Il Doo, a trader with KEB Futures Co.
“After a big rally in the previous session, caution set in among market players,” said Seoul-based Hwang. “Still, should the dollar continue to drop and Asian stocks rise, the downside for gold is limited.”
Gold for immediate delivery dropped 30 cents to $953.55 an ounce at 9:13 a.m. in Singapore. The Dollar Index lost 0.1 percent to 77.987, while the MSCI Asia Pacific Index of regional shares jumped 2.1 percent.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, added 0.9 metric tons to 1,066.41 tons as of Aug. 21, expanding for the first time since July 16, according to figures on the company’s Web site.
Among other precious metals for immediate delivery, silver advanced 1 percent to $14.32 an ounce, platinum gained 0.3 percent to $1,260 an ounce and palladium added 0.9 percent to $283.50 as of 9:19 a.m. in Singapore.