July 6 (Bloomberg) -- Gold futures fell to a six-week low as rallies in global stock markets eroded demand for the precious metal as an alternative investment.
The MSCI World Index of equities climbed as much as 2.5 percent. The Standard & Poor’s 500 Index traded at the cheapest level relative to earnings since March 2009. Imports of gold by India, the world’s biggest consumer, may plunge as much as 36 percent this year, the Indian Bullion Market Association said. On June 21, the metal rose to a record $1,266.50 an ounce.
“There is a lack of bullish enthusiasm for gold,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter.
Gold futures for August delivery fell $12.60, or 1 percent, to $1,195.10 on the Comex in New York. Earlier, the price touched $1,189.50, the lowest level for a most-active contract since May 25. The metal has gained 9 percent this year. The market was closed yesterday for U.S. Independence Day.
Speculative long positions, or bets prices will rise, outnumbered short positions by 244,725 contracts on the Comex in the week ended June 29, up 41 percent since the end of March and the highest level this year, government data showed. Open interest in futures reached a record on June 30.
A rebound by the euro reduced demand for gold as a haven. Last month, the metal rose to records in Swiss francs, U.K. pounds and euros amid Europe’s fiscal crisis.
“While austerity will certainly slow euro-zone economies, it will also add to the soundness of the currency,” said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago. “A stronger euro may also create an impression that the sovereign-debt crisis is abating.”
‘Good Entry Point’
A slump in gold may signal an opportunity to buy, some analysts said.
“With gold touching its lowest close in over a month, we see these levels as a good entry point for fresh long positions,” Hussein Allidina, the head of commodity research at Morgan Stanley, said in a report.
Silver futures for September delivery rose 13.8 cents, or 0.8 percent, to $17.857 an ounce on the Comex.
Platinum futures for October delivery climbed $15.10, or 1 percent, to $1,518.70 an ounce on the New York Mercantile Exchange.
Palladium futures for September delivery rose $13.50, or 3.2 percent, to $440.40 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at email@example.com.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org