April 23 (Bloomberg) -- Gold declined for a second day as equities fell and the dollar’s strength sapped investor appetite for the metal as an alternative investment.
Gold for immediate delivery fell as much as 0.3 percent to $1,138.25 an ounce and traded at $1,138.90 at 2:03 p.m. in Singapore, paring this week’s gain to 0.1 percent. Asian stocks extended a decline and the dollar advanced after the European Union said that Greece’s budget deficit was wider than forecast.
“The big picture has still got to be a concern over what’s going on in Europe,” said Chad Walls, head of precious metal trading with Fortis Bank in Hong Kong. “Gold really needs to be getting out of the $1,155 to $1,160 area. If it doesn’t start moving back again, we’re going to see it slow.”
The dollar gained 0.5 percent today against a basket of six major currencies, advancing to the highest level in a month. The index has strengthened for seven straight days, the longest winning streak since September 2008. Gold rallied 24 percent in 2009, touching an all-time high of $1,226.56 an ounce on Dec. 3, as the dollar lost 4.2 percent.
Fifteen of 20 traders, analysts and brokers surveyed by Bloomberg, or 75 percent, said gold may rise next week. Two people expect a decline and three were neutral.
Safe-haven buying interest in gold should revive even as the metal is being overshadowed at the moment by the dollar’s strength, said Gavin Wendt, a senior resource analyst with Mine Life Pty Ltd. in Sydney.
“I believe investors will still be cautious and on the lookout for more economies that could potentially hit the proverbial iceberg,” said Wendt. “This will help strengthen gold’s price momentum. It would be foolish to be short gold right now.”
Silver decreased 0.2 percent to $17.958 an ounce, platinum lost 0.7 percent to $1,730.80 an ounce and palladium lost 0.4 percent to $560.88 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
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