May 21 (Bloomberg) -- Gold prices fell, capping the biggest weekly loss in five months, as some investors sold to cover losses in other markets by selling bullion.
Commodity prices sank for the fourth consecutive week, and equities tumbled. German business confidence unexpectedly fell after Europe’s debt crisis rattled financial markets, while growth in Europe’s services and manufacturing industries slowed more than economists forecast, figures showed today. The precious metal rallied to a record a week ago.
“Margin requirements continue to pressure prices lower,” Suki Cooper, a Barclays Capital analyst in London, said in a note. Still, long-term interest “remains robust,” she said.
Gold futures for June delivery dropped $12.50, or 1.1 percent, to $1,176.10 an ounce on the Comex in New York. The metal declined 4.2 percent this week, the first slide in a month and the most since the week that ended on Dec. 11.
“There is a lack of confidence in the euro zone, and people may have to shift portfolio assets to safer vehicles” such as gold, said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “The market is very oversold. Bargain-hunters may come in and support prices.”
The Reuters/Jefferies CRB Index of 19 raw materials yesterday dropped to 247.49, the lowest level since September. Oil futures were down 2.2 percent this week, and the MSCI World Index of shares is headed for a 5 percent weekly drop.
Gold futures rose to a record $1,249.70 on May 14 and are on track for a 10th straight annual gain, the longest winning streak since at least 1920, as investors seek to protect their wealth from Europe’s financial turmoil.
“Long-term-oriented investors are still accumulating gold,” Eugen Weinberg, a Frankfurt-based analyst with Commerzbank AG, wrote in a report yesterday. The recent slump “is probably attributable to profit-taking by speculative investors,” he wrote.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 1,220.15 metric tons on May 19. The fund’s assets were unchanged yesterday, its website showed. Ten of 18 traders, investors and analysts surveyed by Bloomberg said bullion would climb next week. Six forecast lower prices and two were neutral.
Silver for July delivery fell 0.4 percent to $17.651 an ounce.
To contact the editor responsible for this story: Stuart Wallace at firstname.lastname@example.org.