Gold remained below US$1,410/oz today as oil prices declined further, hitting gold’s appeal as an inflation hedge and prompting investors to pour money into the US dollar.
Gold is seen as an alternative investment to the US dollar and has an inverse relationship with the American currency.
Even the disastrous earthquake in Japan and the news of mass protests in the oil-rich Saudi Arabia failed to push up gold, which is used for wealth protection. Investors have been shunning gold in favour of other assets after it hit new all time highs above US$1,440/oz earlier this week.
In other news, fighting in Libya continues with pro-government forces gaining momentum. Gaddafi loyalists are preparing to launch an assault on the eastern parts of the country after successfully taking over several towns that were previously under opposition control.
Gold last traded at US$1,408/oz.
Silver declined to US$34.31/oz and platinum climbed to US$1,769/oz.
Randgold Resources (LON:RRS) held steady, while fellow gold producer African Barrick Gold (LON:ABG) lost 1%.
Platinum miner Lonmin (LON:LMI) was little moved.
Silver miner Fresnillo (LON:FRES) rose marginally.
In the FTSE 250, Aquarius Platinum (LON:AQP) rose marginally, while Hochschild Mining (LON:HOC) and Petropavlovsk (LON:POG) lost 2.2% and 1.7% respectively.
Gold declines as falling oil calms inflation fears
Last updated: 08:56 11 Mar 2011 EST, First published: 09:56 11 Mar 2011 EST