Gold Declines for a Third Day on Dollar's Advance, Sales Following Rally
Gold declined for a third day in New York as a stronger dollar curbed demand for the precious metal, some investors sold bullion after its rally last week and other commodities fell.
The dollar climbed to a six-week high against the euro before data forecast to show the U.S. housing market slowed and a report tomorrow that may show German business confidence fell. Gold, which is trading 3.7 percent below a record, usually moves inversely to the U.S. currency. Oil prices and other metals slipped.
“There’s a lack of physical demand and there’s some profit-taking also,” Wolfgang Wrzesniok-Rossbach, head of sales and marketing at Hanau, Germany-based Heraeus Metallhandels GmbH, said today by phone. “There’s a psychological impact” of a stronger dollar and a drop in other commodity prices that’s also pulling gold down, he said.
Gold futures for December delivery lost $9, or 0.7 percent, to $1,219.50 an ounce at 8 a.m. on the Comex in New York. Bullion for immediate delivery in London was 0.7 percent lower at $1,217.60.
Bullion fell to $1,218 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,226 at yesterday’s afternoon fixing. The dollar climbed as much as 0.4 percent against the euro today.
Gold futures strengthened 11 percent this year, reaching an all-time high of $1,266.50 an ounce on June 21, as investors sought to protect their wealth against financial turmoil in Europe and the prospect of slowing economic growth. The metal climbed to a seven-week high of $1,239.50 on Aug. 19.
Equities Fall
Purchases of existing homes in the U.S. dropped to a 4.65 million annual rate in July from 5.37 million in the previous month, according to the median of 74 forecasts in a Bloomberg News survey. European and Asian equities fell and U.S. index futures slipped today, while crude oil futures slid in New York and all six main industrial metals on the London Metal Exchange declined.
“We will continue to see lower gold prices,” said Wallace Ng, Hong Kong-based executive director with ABN Amro Securities Asia Ltd. “It is following the weakness of general markets, like stocks, commodities and energy.”
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,299.47 metric tons yesterday, the company’s website showed. Holdings are 1.6 percent below June’s record of 1,320.44 tons.
Silver for December delivery in New York fell 0.8 percent to $17.89 an ounce. Platinum for October delivery was 1 percent lower at $1,493.50 an ounce. Palladium for September delivery declined 1.1 percent to $478.45 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Kyoungwha Kim in Singapore at Kkim19@bloomberg.net.
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