SINGAPORE (Commodity Online) : Gold dropped further in Asian trade Wednesday as the dollar continued to trade higher against its major rivals that curbed bullion's appeal as an alternative asset.
Spot gold was seen trading at $1092.64 an ounce at 11.30 a.m Singapore time while gold for February delivery in New York was at $1,093.35 an ounce at the same time.
Gold, which almost quadrupled in this decade, rising from $288 on Dec. 31, 1999, is headed for the first monthly decline since August.
Demand for precious metals has surged as investors sought protection against the prospect of a currency debasement and inflation after the worst recession since World War II prompted governments worldwide to increase money supply and shore up their economic growth.
Meanwhile, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings rose to 1,133.622 tonnes as of Dec. 29, up 0.08 percent or 0.914 tonnes from the previous business day. The holdings are slightly below a record high of 1,134.03 tonnes on June 1.
Among other precious metals, platinum for immediate delivery was little changed at $1,461.15 an ounce, silver slid 0.6 percent to $16.99 an ounce and palladium was down 0.4 percent at $385.50 an ounce.
Investor sentiment remained bullish for platinum group metals after the U.S. Securities and Exchange Commission took a step on Dec. 22 that brought the first U.S. platinum exchange traded fund closer to final approval.
The dollar held gains on Wednesday after rising against most major currencies the day before, climbing to a two-month peak versus the yen, boosted by a report showing a rise in U.S. consumer confidence this month.
Some traders also attributed the dollar's gains to year-end buying by asset managers as they square off their positions, with flows going mostly into U.S. Treasuries.
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