Gold may decline for the first time in seven days in New York as a stronger dollar curbs demand for the metal as an alternative investment.
The dollar gained against six major currencies amid speculation Greek Prime Minister George Papandreou will struggle to pass additional austerity measures, even after winning a confidence vote that will pave the way for him to seek approval for a 78 billion-euro ($112 billion) package of budget cuts and asset sales. Gold traded 1.8 percent from a record set in May.
“Dollar gains are holding back gold prices,” John Meyer an analyst at Fairfax IS in London, said today by phone. Still, “investors are looking at uncertainty in Europe,” which will support gold, he said.
Gold for August delivery fell $1.20, or 0.1 percent, to $1,545.20 an ounce by 7:58 a.m. on the Comex in New York. The metal earlier today matched yesterday’s peak of $1,549, matching yesterday’s highest price since June 9. Immediate-delivery gold was 0.1 percent lower at $1,544.75 in London.
A total of 155 lawmakers supported the motion in the 300- seat parliament in Athens early this morning, with 143 voting against. European finance ministers said this week that they would hold off on approving a 12 billion-euro payment to the country promised for July until passage of the plans to cut the deficit, sell state assets and impose a “crisis levy” on wages.
Europe Debt Crisis
The International Monetary Fund, contributor of a third of the bailout money for Greece and the two other euro-area countries that have received bailouts, Ireland and Portugal, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.”
Gold is up 8.7 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades in London. Europe’s debt crisis helped bullion futures reach a record $1,577.40 on May 2. The metal climbed to an all-time high of 958.4289 British pounds today.
“In the short-term, while the European crisis hangs on, we should remain long on gold,” said Kishore Narne, head of research at Anand Rathi Commodities Ltd. in Mumbai. “The buying we are seeing right now is driven by haven demand.”
Silver for July delivery fell 0.8 percent to $36.085 an ounce in New York. Holdings of the metal in exchange-traded products dropped 91.7 metric tons yesterday to 13,460.2 tons, the lowest level since September.
Australia’s Perth Mint said it sold a record 10.7 million 1-ounce silver coins since July 1 last year. That’s 66 percent higher than the previous full fiscal year and about 10-fold more than five years earlier. Sales of 1-ounce gold coins will be close to a record, Sales and Marketing Director Ron Currie said.
Palladium for September delivery declined 0.3 percent to $764.60 an ounce. Platinum for July delivery was little changed at $1,746 an ounce.
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