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By Clara Denina
LONDON (Reuters) – Gold edged lower on Tuesday, partly in response to gains in stock markets around the world which reduced the appeal of the precious metal often perceived as a refuge from riskier assets.
Spot gold fell 0.1 percent to $ 1,271.70 per ounce by 1142 GMT, while U.S. gold futures were unchanged at $ 1,273.70.
“There is a little profit taking in gold because the shares market is higher,” Societe Generale analyst Robin Bhar said.
“We may have a final look at $ 1,300 and then back down. We have got the CPI out of the U.S. today so that could drive the dollar and then we have some Fed officials talking so that could also influence things,” Bhar said.
European shares hit a two-week high on Tuesday, bolstered by mining firms which tracked a rally in industrial metals, while the dollar was flat against a basket of six major currencies ahead of U.S. inflation data due at 1230 GMT.
A weaker U.S. currency makes dollar-denominated gold cheaper for holders of other currencies, while strong stock markets reduce gold’s attraction as a safe haven.
U.S. regulatory filings on Monday showed some influential investors, including billionaire financier George Soros, bought into gold through exchange-traded funds in the first quarter.
Soros, who once called gold “the ultimate bubble”, returned to the world’s biggest gold exchanged-traded fund (ETFs) after a three year absence, buying 1.05 million shares in SPDR Gold Trust worth about $ 123.5 million.
“Investor flows into ETFs remain pretty strong and that just shows any dips we are seeing in the gold market seem to be a relatively short, with investors taking the opportunity to hold on to their long positions,” ANZ analyst Daniel Hynes said.
SPDR Gold Trust’s assets have been rising steadily this year and are at their highest since November 2013.
But long-time gold bull John Paulson cut his bets on bullion.
Gold has rallied 20 percent this year on speculation the U.S. Federal Reserve has slowed its expected pace of rate increases on concerns about the volatility of global markets.
The Fed should consider raising rates at its June meeting, Richmond Fed President Jeffrey Lacker told the Washington Post in an interview published on Monday, saying inflation was moving towards 2 percent and labour markets had tightened.
Among other precious metals, spot silver fell 0.3 percent to $ 17.07 per ounce, spot platinum was down 0.2 percent at $ 1,043.70 per ounce and spot palladium lost 1.1 percent to touch $ 583.97 an ounce.
The platinum/palladium ratio has reached its highest in about a month this week, as it resumes its slow climb higher after reaching its lowest since 2002 in October.
An ounce of platinum now buys 1.78 ounces of palladium, up from 1.64 ounces at the start of the year.
(Additional reporting by Koustav Samanta and Vijaykumar Vedala in Bengaluru and Jan Harvey in London; editing by Jane Merriman and David Clarke)
