Gold was steady on Thursday but under pressure as the U.S. dollar held onto the previous day's gains, pushing oil lower and weakening bullion's appeal both as an anti-inflation tool and an alternative currency
Gold was steady on Thursday but under pressure as the U.S. dollar held onto the previous day's gains, pushing oil lower and weakening bullion's appeal both as an anti-inflation tool and an alternative currency.
Spot gold was quoted at $900.50/901.50 an ounce by 0310 GMT, marginally up from $899.65/901.05 an ounce in New York on Wednesday.
"If oil falls 3-4 percent this week, gold could fall 4-5 percent," Pervan added, predicting that gold prices could fall to $880 an ounce by the end of this week, and $850 next week before bottoming out.
Gold has already fallen some $35 an ounce from last week's $935.30-high, which was its highest in a month and came after oil hit an all-time peak of $135.09 a barrel.
The dollar on Thursday clung to gains made in the previous session after stronger-than-expected U.S. durable goods orders eased concerns about the U.S. economy outlook.
The dollar index, which measures the dollar's value against a basket of major currencies, dipped to 72.506 .DXY, but still kept much of the gains made on Wednesday when it rose around 0.3 percent.
The stronger dollar also added a bearish tone to oil prices, which have failed to reach new records for a week as several developing nations in Asia have cut subsidies, possibly prompting a drop in Asian energy demand.
Front-month U.S. crude for July delivery CLc1 was down 66 cents at $130.37 a barrel on the Globex electronic trading platform by 0319 GMT.
Gold tends to move in line with oil prices as dearer crude boosts bullion's appeal as a hedge against inflation.
Gold futures for June delivery GCM8 on the COMEX division of the New York Mercantile Exchange were down $0.30 an ounce at $900.20 an ounce.
The most active Tokyo gold futures contract for April, ended the morning session on the Tocom Commodity Exchange up 31 yen at 3,059 yen per gram.