By Clare Hutchison
London - Gold fell on Wednesday, poised for its first four-day losing streak since August, taking a cue from euro weakness as fear mounted on peripheral euro zone economies along with wider concern about the global economy.
Investors clung to the dollar, which held near a month high against a basket of currencies, with growing anxiety on the lack of a clear timetable for a Spanish bailout.
The International Monetary Fund expects a Spanish public deficit of 7 percent of GDP in 2012, which sent yields on its 10-year paper nine basis points higher to 5.93 percent.
The IMF cut its global growth forecast for 2012 to 3.3 percent from an earlier estimate of 3.5 percent and predicted a contraction in the euro zone of 0.4 percent.
Spot gold, usually pressured by a stronger greenback, traded 0.1 percent lower at $1,762.84 per ounce by 1052, close to a 10-day low. US gold futures were lower at $1,763.40.
“In the short term foreign exchange movements are what is moving gold. It's difficult to know whether it's dollar strength or euro weakness, but in the markets there is still clearly concern about what might happen to the euro,” said David Jollie of Mitsui Precious Metals.
The single European currency was 0.1 percent lower versus the dollar on Tuesday. European and Asian shares also lost ground.
Some analysts said bullion looked to have simply run out of steam after a rally in the third quarter that took prices to 11-month highs above $1,795, as major central banks loosened monetary policy.
“With the market stumbling in sight of $1,800/oz, we believe that the path of least resistance is lower, at least in the near term,” HSBC said in a note to clients, adding that the market could probe $1,750.
“The long-running rally is intact, however, and we expect that gold prices will revive after a period of consolidation,” the bank added. - Reuters