Gold eases as greenback offsets consumer boost in Asian market

Gold held near four-week highs yesterday, as support from further evidence of consumer demand in Asia was offset by the strength of the dollar, although investor nerves over the Eurozone should insulate the price from any steep declines. China's trade surplus narrowed for a second month in a row in September, driven by a contraction in imports and exports that reflected the slowing global economy and also a softer domestic market, which put pressure on industrial commodities. The mood across markets was cautious in Europe ahead of a sale of Italian bonds, which will test fragile investor confidence in the ability of Eurozone leaders to solve the debt crisis. Gold has risen by more than 2 per cent this week, due to robust demand from jewellers and other consumers in Asia, where premiums are at their highest since the start of the year. The spot gold price was last down 0.5 per cent on the day at $1,670.00 (Dh6,133.83) an ounce, having come off an overnight high at $1,683.89, and was set for a 2.4 per cent gain this week. "We still consider the gold price as being well supported by physical demand but we wouldn't be surprised if gold prices did come under some downward pressure," said Commerzbank head of commodities strategy Eugen Weinberg.