NEW YORK/LONDON: Gold hit its lowest in more than two weeks in Europe on Friday as the dollar steadied amid wariness over whether any clear agreement to tackle currency imbalances will be reached at this weekend's G20 meeting. Gold for current delivery closed at $1,325.90 per troy ounce Friday on the New York Mercantile Exchange, up from $1,324.70 late Thursday. US gold futures for December delivery fell $4.80 an ounce to $1,320.80. Spot prices rallied sharply to a record $1,387.10 an ounce late last week but have struggled to maintain traction as the dollar rebounded from lows amid fears expected US monetary easing had been too heavily priced into the market. “The main pressure is the dollar, but also profit-taking,” said Commerzbank analyst Eugen Weinberg. “There has been so much hot money flowing into the markets over recent weeks that it is not surprising to see profit-taking on the current weakness.” The dollar was on track for its first weekly rise in six weeks versus a basket of major currencies, trading up 0.1 percent. Traders are awaiting the G20 meeting in South Korea for direction, although significant action is not expected, and a forthcoming Fed policy meeting that could result in quantitative easing is likely to limit the dollar's gains. The dollar's strength has led to a 3.5 percent drop this week in gold, now heading for a decline roughly equivalent to its last big fall in mid-July. Pressure from technical factors is being brought to bear, analysts said. “In all these markets, there are chart patterns which form as the market moves on the way up and it triggers plays and stops on the way down,” said ANZ Bank analyst Peter Hillyard. “Some of the minor chart points have been breached and this is causing the market to come back,” he added. “But I'm not surprised. It has had a fabulous run-up and a correction back $70 is nothing, really.” Good physical demand from traditional bullion-buying centers such as India is strengthening as prices descend, he added, which is likely to support the market above $1,300 an ounce. “Physical demand is certainly a feature, but it isn't enough yet to mop up that selling,” he said. “Investor selling is always going to beat physical demand, but often what it (physical demand) does is herald where the market is going to go next.” Dealers in India were continuing to stock up for forthcoming festivals as prices extended losses.
