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Gold inched down on Tuesday as investors sold bullion to lock in profits after it gained nearly 1 per cent in the previous session on safe-haven buying following concerns over the arrests of some Saudi royal family members and ministers on corruption charges.
Spot gold was down 0.2 per cent at $1,278.75 per ounce as of 0746 GMT.
The metal jumped nearly 1 per cent on Monday, its biggest single-day percentage gain since September 25 and closing above its 100-day moving average, which is typically seen as a bullish signal by technical traders. US gold futures for December delivery fell 0.2 per cent to $1,279.30 per ounce.
“Saudi Arabia appears to have spooked global markets with the spillover from oil flowing into other markets. Gold has benefited from safe haven flows... Asia has seen some profit taking set in,” said Jeffrey Halley, a senior market analyst with OANDA.
Saudi Arabia's anti-corruption purge
Saudi Arabia's future king, Crown Prince Mohammed bin Salman, tightened his grip on power through an anti-corruption purge by arresting some members of the kingdom's political and business elite.
The campaign of mass arrests expanded on Monday after a top entrepreneur was reportedly detained in the biggest anti-corruption purge of the kingdom's affluent elite in its modern history.
“The situation in Saudi Arabia will bear close watching and will likely be the prime driver for gold,” said INTL FCStone analyst Edward Meir in a note.
Trump's S. Korea visit
US President Donald Trump's visit to South Korea could also provide gold with some support over the next few days, Meir added.
Trump flew in to South Korea on Tuesday, the closest he has come to the frontlines of the nuclear standoff with North Korea, saying a solution must be found to the security threat posed by Pyongyang.
“We expected some interest in gold following the (Monday's) close above $1,280. However, Chinese selling, with the SGE premium lower at $7.00-8.00, appears to be capping the market," MKS PAMP analyst Tim Brown wrote in a note.
Asian shares rallied to their highest in a decade, while the dollar index, which tracks the greenback against a basket of six major currencies, added 0.2 per cent to 94.941 .
Spot gold may end its consolidation within a narrow range of $1,263 to $1,281 per ounce very soon and then either bounce more to $1,299 or fall sharply towards $1,241, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver dropped 0.6 per cent to $17.12 an ounce after hitting its highest since October 20 at $17.27 earlier in the session. Platinum was down 0.9 per cent at $925.99 per ounce, while palladium fell 0.3 per cent to $997.
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