Gold Futures Decline on Speculation Demand Will Ease as Euro Stabilizes

Gold futures fell, extending a decline in July that was the biggest in seven months, as a rebound in the euro eased demand for the precious metal as an alternative to the currency.

The euro rose as much as 1.1 percent against the dollar, touching the highest level since May 5. Before today, gold futures increased 8 percent this year, reaching a record $1,266.50 an ounce on June 21. The metal also climbed to all- time highs in euros on June 7 amid Europe’s sovereign-debt crisis.

“On the rallies, you’ve got some investors moving out of gold and back into euros,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “It’s the continuation of the unwinding of the long-gold, short-euro trade.”

Gold futures for December delivery fell $1.50, or 0.1 percent, to $1,182.40 at 12:02 p.m. on the Comex in New York. Prices fell 5 percent in July.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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