Nov. 25 (Bloomberg) -- Gold may decline as investors seeking a protection of wealth during Europe’s sovereign-debt crisis turn to the dollar, curbing demand for the precious metal. Palladium dropped to a seven-week low.
Bullion for immediate delivery was little changed at $1,694.18 an ounce at 11:57 a.m. in Singapore, on course for a second weekly decline. February-delivery futures were also little changed at $1,697.90 on the Comex in New York, where floor trading was closed yesterday for the Thanksgiving holiday.
German Chancellor Angela Merkel said yesterday that joint euro bonds would send a “wrong signal,” damping optimism about a potential remedy for the debt crisis. The Dollar Index, which tracks the currency against six major counterparts including the euro, rose to 79.26 today, the highest level since Oct. 6.
“Gold is looking to trade down today because the U.S. dollar is being traded up,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Investors seeking haven are turning more toward the U.S. dollar than gold, and that’s been the case since the price slipped from $1,900.”
Holdings in exchange-traded products backed by gold climbed 2.7 metric tons on Nov. 23 to an all-time high of 2,350.76 tons, data compiled by Bloomberg show. The volume has climbed 3.5 percent this month, set for the biggest gain since July.
Gold reached a record $1,921.15 on Sept. 6 as investors sought to diversify away from equities and some currencies amid concerns that economic growth may slow. The metal fell to $1,667.03 on Nov. 21, the lowest price in almost four weeks.
Silver for immediate delivery fell 0.3 percent to $31.7725 an ounce after losing as much as 0.8 percent, while platinum climbed as much as 0.4 percent to $1,548.75 an ounce. Palladium gained 0.2 percent to $582 an ounce, after losing as much as 1 percent to $575.50, the lowest price since Oct. 6.
To contact the reporter on this story: Jason Scott in Melbourne at firstname.lastname@example.org
To contact the editors responsible for this story: James Poole at email@example.com