Gold struggled to move away from a five-year low on Wednesday,
reflecting sustained pressure on the metal days after its steepest fall
in almost two years, with more losses seen ahead as the demand outlook
dims.
India is not rushing to pick up the slack in Chinese demand as would-be buyers wait for further price declines, as a wedding season lull and poor rains curb appetite.
Spot gold was little changed at $1,101.28 an ounce by 0046 GMT, not far above Monday's trough of $1,088.05 when bullion slid as much as 4 per cent in a selloff exacerbated by huge volumes traded on the Shanghai Gold Exchange.
US gold for August delivery slipped 0.3 per cent to $1,100.50 an ounce.
Investors are finding less reason to hold gold as a safe haven following the global financial crisis, with the dollar strengthening before what is expected to be the first rate increase by the US Federal Reserve in nearly a decade.
While bullion's slump is heaping new pressure on an already stressed gold mining industry, mine closures are not expected to happen quickly as operators instead try to reduce costs to keep operations going.
But the steep price slide threatens to squash a run of mining mergers and acquisitions just as momentum in the sector was picking up. Mining executives and fund managers warn predators will turn more cautious before splashing out cash or approving capital raisings, at least until bullion shows signs of stabilising.
Gold no longer has the allure it once had for funds, as a failure to perform when its price was expected to rise and recent volatility, prompt them to seek returns and protection elsewhere.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell further to 22.17 million ounces on Tuesday, the lowest since August 2008.
India is not rushing to pick up the slack in Chinese demand as would-be buyers wait for further price declines, as a wedding season lull and poor rains curb appetite.
Spot gold was little changed at $1,101.28 an ounce by 0046 GMT, not far above Monday's trough of $1,088.05 when bullion slid as much as 4 per cent in a selloff exacerbated by huge volumes traded on the Shanghai Gold Exchange.
US gold for August delivery slipped 0.3 per cent to $1,100.50 an ounce.
Investors are finding less reason to hold gold as a safe haven following the global financial crisis, with the dollar strengthening before what is expected to be the first rate increase by the US Federal Reserve in nearly a decade.
While bullion's slump is heaping new pressure on an already stressed gold mining industry, mine closures are not expected to happen quickly as operators instead try to reduce costs to keep operations going.
But the steep price slide threatens to squash a run of mining mergers and acquisitions just as momentum in the sector was picking up. Mining executives and fund managers warn predators will turn more cautious before splashing out cash or approving capital raisings, at least until bullion shows signs of stabilising.
Gold no longer has the allure it once had for funds, as a failure to perform when its price was expected to rise and recent volatility, prompt them to seek returns and protection elsewhere.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell further to 22.17 million ounces on Tuesday, the lowest since August 2008.
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