Gold Falls on Concern Economy Is Slowing as Dollar Gains
Gold futures dropped to the lowest since January as signs of slowing growth from China to Germany sent the dollar higher, curbing demand for the precious metal. Palladium slumped the most this year.
The Standard & Poor’s GSCI Index (SPGSCI) of 24 raw materials fell as much as 1.6 percent after Germany’s manufacturing and services industries unexpectedly weakened and a report showed China’s manufacturing may contract for a fifth straight month in March. The dollar rose as much as 0.4 percent against a basket of six currencies.
Weaker industrial output “in Asia and Europe lead to a stronger dollar, and lately the dollar has been a strong driver of gold prices,” Bernard Dahdah, a London-based analyst at Natixis Commodity Markets Ltd., said in an e-mail.
Gold futures for April delivery fell 0.5 percent to $1,642.50 an ounce at 1:44 p.m. on the Comex in New York, after touching $1,627.50, the lowest since Jan. 13. Still, prices are up 4.8 percent this year.
Jewelers in north and east India, the world’s biggest bullion importer, will continue a shutdown to protest higher taxes, leaving about half the nation’s stores closed, according to a trade group. Jewelers held the first nationwide strike in seven years after the government raised taxes on imports and on non-branded jewelry last week.
“With physical demand not at full strength and waning investor enthusiasm, the potential for further downside in gold remains exposed,” Leon Westgate, an analyst at Standard Bank Plc, said in a report.
Silver futures for May delivery tumbled 2.7 percent to $31.345 an ounce on the Comex. Earlier prices touched $31.09, the lowest since Jan. 20.
On the New York Mercantile Exchange, palladium futures for June delivery declined 5.5 percent to $651.05 an ounce, the biggest fall for a most-active contract since Dec. 14. Earlier, prices fell to $650.40, the lowest since Jan. 18. Platinum futures for April delivery retreated 1.7 percent to $1,612.10 an ounce.
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