Gold Drops as Dollar Rallies on Fed Tapering Bets
Gold futures rose the most in a week in New York on speculation that this year’s slump will spur stronger physical demand. Platinum climbed as workers employed by the world’s largest producer of the metal went on strike.
Gold fell a record 23 percent in the second quarter, reaching $1,179.40 an ounce on June 28, the lowest since Aug. 2, 2010. Indian jewelry demand is set to pick up before the Diwali festival, Catherine Raw, portfolio manager of BlackRock World Mining Trust, said in an e-mailed statement today. The dollar slid as much as 0.3 percent against a basket of six currencies.
“The drop below $1,200 has brought in some physical buyers,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “The weakness in the dollar is also supporting prices.”
Gold futures for August delivery rose 1.8 percent to settle at $1,234.90 at 1:45 p.m. on the Comex in New York, the biggest gain for a most-active contract since July 1.
Bullion has slipped 26 percent this year, wiping about $62 billion from the value of gold-backed exchange-traded products, after some investors lost faith in the metal as a store of value as Federal Reserve Chairman Ben S. Bernanke said the central bank may slow its $85 billion of asset purchases this year. Data released last week showed U.S. employers added more jobs in June than economists estimated.
Silver futures for September delivery added 1.6 percent to $19.038 an ounce in New York. Prices dropped 3.8 percent last week. Trading was 48 percent lower than the 100-day average for this time of day, according to data compiled by Bloomberg.
On the New York Mercantile Exchange, platinum futures for October delivery climbed 2.7 percent to $1,362 an ounce.
Anglo American Platinum Ltd. (AMS) said about 5,600 workers went on strike at two mines in South Africa. Workers are protesting the suspension of union officials and also want the company to halt its job-cuts process.
Palladium futures for September delivery jumped 2.6 percent to $695.40 an ounce, the biggest gain in a week.
To contact the editor responsible for this story: Steve Stroth at email@example.com