Spot Gold Prices slipped during the Asian session on Thursday, sliding $4 as the London open approached to sit near yesterday's lows at $707.20 per ounce.
"There will be a little bit of short-term selling against the recent highs," reckons Frank McGhee, head of metals trading at Integrated Brokerage Services in Chicago.
"The Gold Market has been a leader, and the Euro and oil are now playing catch-up to gold."
Gold futures traded in Tokyo closed Thursday just ¥4 lower per gram, barely changed for the session and 2.5% higher from this time last week. The Nikkei stock-market index rose 0.23% as potential candidates began vying to replace Prime Minister Abe, who stood down yesterday.
Crude oil prices broke fresh all-time highs in US trade on Wednesday topping $80 per barrel as domestic stockpiles fell sharply and a tropical storm – Humberto – neared the Texas coast.
Early this morning, Humberto was upgraded to a hurricane after wind speeds reachd 80mph. It's due to make landfall on the Texas/Louisiana coasts ater today.
Brent crude prices dipped early in London, but the price of oil remains 31% higher for this year so far according to Bloomberg data. Oil price have quadrupled since 2002.
On the currency market, the Euro dipped 25 pips overnight from its new record high versus the Dollar of $1.3915. That capped the retreat in Gold Priced in Euros but it also dipped towards Wednesday's low of €509 per ounce, some 1.3% higher from this time last week.
"The weaker Dollar is really a key feature of the gold rally," says Patrick Chidley at Barnard Jacobs Mellet & Co. in Stamford, Connecticut. "If the US does cut rates [on Sept. 18th], it's going to make holding gold more attractive because the opportunity cost of holding gold is going to be less."