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(Updating with full report)
LONDON (Thomson Financial) - Gold dipped in morning trade, falling back slightly from Friday's two-week high as investors sold off stocks of the metal to cover losses on the Chinese market this morning and on an absence of further bullish news.
At 10.20 am, spot gold was quoted at 669.75 usd an ounce, down slightly from the 671.30 usd level seen in late New York trade on Friday, when the precious metal hit a two-week high of 671.70 usd.
Gold dipped in Asian trade as investors sold off stocks of the precious metal to cover positions elsewhere as equities in mainland China slumped.
China's composite index recorded a decline of 8.26 pct this morning, the largest drop since late February's 8.8 pct, on ongoing fears the government will take more action to curb the speculative frenzy in mainland stocks, local dealers said.
Investors have liquidated gold stocks in an attempt to raise cash to cover positions on the equities markets.
But the dip is likely to be temporary, analysts said. "I don't think this is bad news for gold," said analyst James Moore of TheBullionDesk.com. "It really underpins gold's position as a safe haven."
Nonetheless investors are unconvinced Friday's prices are sustainable in light of a lack of further bullish factors, such as a likelihood of a drop in the US dollar against other currencies.
"There is nothing really out there to bring people back into the market," noted Michael Widmer, an analyst at Calyon.
However the precious metal remains near recent highs, hit after the European Central Bank said on Friday it did not intend to sell off any more of its reserves of the metal, supported by steady oil prices and ongoing geopolitical tensions, analysts said.
The metal is seen trading in a relatively narrow range going forward, analysts said, with the 665 usd resistance level now seen as the floor in prices.
"This area of previous resistance should now prove to be the immediate key support area and without the potential pressure of European Bank sales, at least until September, gold could receive a renewed boost and likely test higher, with an initial target of 680 usd, followed by 692 usd and 700 usd," said analysts at Standard Bank.
However, significant rises in the metal are not expected until the third and fourth quarters, after the typically quiet summer period is over.
Other precious metals dipped in sympathy, with platinum falling to 1,285 usd against 1,290 usd and palladium dipping to 365 usd against 370 usd.
Silver eased to 13.63 usd against 13.66 usd.
(Updating with full report)
LONDON (Thomson Financial) - Gold dipped in morning trade, falling back slightly from Friday's two-week high as investors sold off stocks of the metal to cover losses on the Chinese market this morning and on an absence of further bullish news.
At 10.20 am, spot gold was quoted at 669.75 usd an ounce, down slightly from the 671.30 usd level seen in late New York trade on Friday, when the precious metal hit a two-week high of 671.70 usd.
Gold dipped in Asian trade as investors sold off stocks of the precious metal to cover positions elsewhere as equities in mainland China slumped.
China's composite index recorded a decline of 8.26 pct this morning, the largest drop since late February's 8.8 pct, on ongoing fears the government will take more action to curb the speculative frenzy in mainland stocks, local dealers said.
Investors have liquidated gold stocks in an attempt to raise cash to cover positions on the equities markets.
But the dip is likely to be temporary, analysts said. "I don't think this is bad news for gold," said analyst James Moore of TheBullionDesk.com. "It really underpins gold's position as a safe haven."
Nonetheless investors are unconvinced Friday's prices are sustainable in light of a lack of further bullish factors, such as a likelihood of a drop in the US dollar against other currencies.
"There is nothing really out there to bring people back into the market," noted Michael Widmer, an analyst at Calyon.
However the precious metal remains near recent highs, hit after the European Central Bank said on Friday it did not intend to sell off any more of its reserves of the metal, supported by steady oil prices and ongoing geopolitical tensions, analysts said.
The metal is seen trading in a relatively narrow range going forward, analysts said, with the 665 usd resistance level now seen as the floor in prices.
"This area of previous resistance should now prove to be the immediate key support area and without the potential pressure of European Bank sales, at least until September, gold could receive a renewed boost and likely test higher, with an initial target of 680 usd, followed by 692 usd and 700 usd," said analysts at Standard Bank.
However, significant rises in the metal are not expected until the third and fourth quarters, after the typically quiet summer period is over.
Other precious metals dipped in sympathy, with platinum falling to 1,285 usd against 1,290 usd and palladium dipping to 365 usd against 370 usd.
Silver eased to 13.63 usd against 13.66 usd.
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