“SINGAPORE (Reuters) – Gold fell for a second straight day on Wednesday as a holiday in China deprived the metal of a strong support base and as investors worried about global central banks scaling back their easy-money policies.
The Bank of Japan’s (BoJ) move on Tuesday to refrain from taking fresh steps to calm turbulence in the domestic bond market, and Standard & Poor’s upgrade of the U.S. credit outlook on Monday indicated that the global economy was on track for a recovery, hurting bullion’s appeal as a hedge against inflation.
“The sentiment is still bearish,” said a trader in Sydney. “Since there is no China today, we can expect gold to fall again towards $1,365.”
China, which is on a three-day holiday for the Dragon Boat festival, has been a key support for gold prices during Asian hours as its demand continues to be strong. The No. 2 bullion consumer has, to an extent, overshadowed concerns about slowing demand in India, the biggest gold buyer, traders have said.
China’s gold imports from Hong Kong touched an all-time high in March as buyers scrambled to buy bullion, and the surging appetite caused a supply shortage in April. Premiums for gold bars in China also touched record highs last month.
“With the Chinese out until Thursday, the market is lacking a key stabilising factor, and we continue to see little support for gold at least until their return,” ANZ analysts wrote in a note.
Spot gold fell 0.3 percent to $1,375.1 an ounce at 0642 GMT, after a 0.5 percent drop the day before as equity and commodity markets were rattled by the BOJ standing pat….”
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