Gold slides from 12-week high as oil, copper stumble

On Wednesday, Gold struggled to hold near a 12-week high as a tumult in commodities such as oil and copper took a toll on the metal, offsetting safe-haven bids arising from global growth concerns, says a report.

Further, the report says that oil added to losses on Wednesday to trade near its lowest since 2009, while copper dropped to 5-1/2 year lows. Spot gold fell 0.3 per cent to $1,227.50 an ounce by 0339 GMT, after marking a 12-week high of $1,243.60 on Tuesday.

Asian equities dipped on worries over global economic growth. On Tuesday the World Bank lowered its global growth forecasts for 2015 and next year due to disappointing prospects in the euro zone, Japan and some major emerging economies. Typically, lower equities and a slowdown in the global economy would have lifted the price of safe-haven gold, but bullion traders found it hard to ignore the sharp sell-offs in oil and copper on Wednesday, adds a report.

Three-month copper on the London Metal Exchange tumbled as much as 8.7 per cent, while Shanghai copper fell 5 per cent, the maximum it is allowed to fall in one day, because of the global economic concerns and a wave of stop-loss orders. Adding to the pressure on bullion was strength in the dollar, which makes gold more expensive for holders of other currencies and also dulls its appeal as a hedge, adds a report.

The report further adds that the greenback scaled a nine-year peak against the euro on Wednesday as bolder stimulus from the European Central Bank seemed imminent. In the physical bullion markets, buyers turned cautious after gold failed to hold on to the previous session's highs. Premiums in top consumer China fell to around $3 an ounce over the global benchmark from $4-$5 in the previous session. Among other precious metals, silver slipped 1 per cent after gaining nearly 3 per cent on Tuesday. Palladium and platinum also declined.