Spot gold slipped on Thursday on dollar rally after Fed decision

A pricier dollar makes commodities denominated in the greenback more expensive to buy for holders of other currencies.

“Investors are buying the dollar and selling gold,” said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong.

“But the physical supply is a bit tight, as Asian buyers stock up on physical gold.”

Investors are shifting their attention to the Group of 20 talks, due to take place in Washington on Thursday and Friday, where Europe

will be under heavy pressure to stem its deepening debt crisis.

Other precious metals also weakened amid a commodity-wide slide.

Spot palladium dropped to a 10-month low of $680.15, tracking a price drop in gold as well as industrial metals.

Spot platinum dipped to a six-week low $1,740.55, before recovering to $1,747.24.

China’s factory sector contracted for a third consecutive month in September as flagging overseas demand put the brakes on new orders, HSBC’s China Flash PMI data showed.

Slower growth in the world’s top commodity consumer could add to pressure on prices of silver, platinum and palladium, which have wide industrial applications. – Reuters

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