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Gold's rally losing steam as gains in global stocks hurt demand
[SINGAPORE] Gold held a decline as speculation that central banks will remain supportive of growth underpins gains in global equities, curbing demand for a haven and pushing US stock benchmarks to records.
Bullion for immediate delivery was little changed at US$1,338.55 an ounce at 9:13 am in Singapore, according to Bloomberg generic pricing. After losing 0.6 per cent on Thursday, the metal is little changed this week.
Gold has fluctuated this week as investors seek to gauge whether the Federal Reserve will tighten in the coming months. The metal remains about 26 per cent higher in 2016 even as global stocks have advanced.
On Thursday, the S&P 500 Index, the Dow Jones Industrial Average and the Nasdaq Composite Index all rose to records, the first time that's happened simultaneously since 1999.
There's no doubt that gold is being hurt by the rally in equities, according to Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd in Sydney.
"There seems to be money swishing between the two," he said. "So any surging in equity markets is seeing a drop off in investor appetite for precious metals."