By Karthika Suresh Namboothiri
BENGALURU (Reuters) - Gold eased on Monday, sliding off a more than three-month peak hit in the previous session, pressured by a strong dollar and as investors moved back into riskier assets following a recent selloff in global stocks.
Spot gold was down 0.3 percent to $1,230.02 per ounce at 12:29 a.m. ET (1629 GMT). U.S. gold futures were down 0.3 percent at $1,232.
"With the international markets being up, I can see why there is no big demand, no reason for people to hold gold right now," said Michael Matousek, head trader at U.S. Global Investors, adding that a sustained rally in equities could push gold down to around the $1,216 level.
Wall Street was likely to follow European shares higher, bolstered by a surge in autos stocks, after a string of choppy sessions in global stock markets last week, which had prompted a flight to safer assets, and pushed gold to its highest since July 17 on Friday, at $1,243.32.
Also denting gold's appeal were gains in the greenback, with the dollar edging back towards the 10-week high it hit on Friday against a basket of its key rivals, making gold more expensive for holders of other currencies.
The common currency also edged higher against the euro after German Chancellor Angela Merkel said she would not seek re-election as head of her CDU party.
"Gold is now increasingly in need of supporting fundamentals to carry it higher. This after the tailwind from short covering begins to fade given the sharp reduction witnessed during the past few weeks," said Saxo Bank analyst Ole Hansen.
Hedge funds and money managers cut their net short positions in gold to the smallest since mid July, data showed.
Banks and brokerages have cut their average gold price forecasts for this year and 2019, but they still expect prices to stage a modest recovery, a Reuters poll showed.
On the technical front, immediate support stood around the 14-day moving average, at $1,224, and then around $1,220, the 100-day moving average, said Alexander Zumpfe, a precious metals trader at Heraeus.
Some profit taking following recent gains was also responsible for gold's move lower, he added.
Silver eased 0.1 percent to $14.59.
Palladium, which hit a record $1,150.50 an ounce last week, fell 0.6 percent to $1,098.10, while platinum climbed 0.6 percent to $834.90.
Palladium's price premium over platinum will widen next year, a separate Reuters poll showed. Shortages of palladium and surpluses of platinum have flipped the usual hierarchy between the two metals, both used in catalytic converters to reduce vehicle emissions.
(Additional reporting by Swati Verma and Arpan Varghese in Bengaluru; Editing by Jan Harvey and Susan Thomas)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Oct 30, 2018 00:05:35 IST