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Gold was steady on Thursday as Asian stocks recovered from earlier losses, but the metal stayed below a 12-week high as a recent sell-off in commodities took its toll.
Asian stocks pared earlier losses and edged up on Thursday after a rebound in oil prices brought a semblance of calm, but global growth worries remained after weak US retail sales data compounded concerns over plunging copper prices.
Spot gold
Spot gold had steadied at $1,230.65 an ounce by 0403 GMT. The metal had on Wednesday jumped to its highest since October 23 at $1,244, before paring gains to close flat.
Gold was sold off along with copper, which slid to a 5-1/2 year low on Wednesday after the World Bank cut its global growth forecast, and oil, which rebounded late in the session.
“Gold has now tested $1,245 three times and failed on each occasion. We believe gold could test $1,215-20 in the coming days,’’ said Jason Cerisola, a metals dealer at MKS Group.
The bearish mood towards commodities failed to offset disappointing US retail sales data and a weaker dollar that would have typically boosted safe-haven bids for the metal.
US retail sales
The dollar nursed losses on Thursday, having retreated across the board after US retail sales recorded their largest decline in 11 months in December. But the greenback is still not too far from a nine-year peak.
Gold prices are up 4 percent so far this month, after two straight years of declines, but the outlook for the year remains clouded.
UBS price forecast
UBS lowered its gold price forecast for the year to $1,190 from $1,200, saying it had underestimated the downside risks earlier.
“Downside risks have slightly been increased by the decline in oil prices given the potential positive impact this would have on the US economy and the implied absence of an inflation threat,’’ UBS analysts said in a note on Thursday.
The dollar strength is also likely acting as a ceiling for gold rallies amid lower US yields and lurking concerns over global economic growth and deflation, they said.
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