Gold pared its earlier gains on Monday as the dollar soared against a basket of major currencies, thereby denting the appeal of the metal as an alternative investment.
The precious metal soared to a high of $1094.14 an ounce, while currently trading around 1088.55, compared to the session’s opening at $1089.12.
The yellow metal climbed to the previously mentioned peak amid the tumble in Asian shares to lowest since 2011 and after downbeat U.S. data last week.
Worries from China and further tumble in oil prices continued to cause negativity in the general sentiment, therefore giving some haven demand on bullion.
Amid slowdown concerns from the world’s second biggest economy, investors will focus on the fourth quarter’s GDP data that may signal a slowdown to 6.9 percent, the slowest in 25 years.
Oil prices plunged near the lowest level since 2003 after the lifting of Western sanctions on Iran in the weekend, paving the way for even extra production in the already oversupplied market.
Downbeat data released on Friday showed U.S. producer prices fell 0.2 percent in December, while marked its 11th straight fall (on annual basis) as it dipped 1 percent last month.
Dull industrial production and retail sales lowered growth expectations for the last quarter of 2015, and raised speculations the Fed may postpone its predicted rate hike in March.
However, the U.S. dollar rose against a basket of major currencies to dent the appeal of the metal as an alternative investment.
The dollar index soared to 99.11, compared to the session’s opening at 98.99, where bond and stock markets are closed on Monday due to the Martin Luther King’s holiday.
