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Gold Falls as China Pledge Curbs Appeal of Metal as Haven

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May 21 (Bloomberg) -- Gold fell for the first time in three sessions as China signaled that it would support the economy and German and French officials said they want to keep Greece in the euro, eroding the appeal of the metal as a haven.

The Standard & Poor’s 500 Index of equities rose as much as 1.3 percent as Premier Wen Jiabao said China should adopt a “proactive fiscal policy and a prudent monetary policy,” and German and French leaders agreed to do work to keep Greece in Europe’s currency union. Gold has advanced 1.4 percent this year partly on concern that the crisis in Europe may worsen.

“There is a rush for equities,” Bart Melek, the head of commodity strategy at TD Securities Inc. in Toronto, said in a telephone interview. “The mood is more positive today, and we are seeing a flight towards riskier assets.”

Gold futures for June delivery fell 0.2 percent to settle at $1,588.70 an ounce at 1:41 p.m. on the Comex in New York. The price touched $1,526.70 on May 16, the lowest this year.

Silver futures for July delivery slipped 1.4 percent to $28.321 an ounce in New York, dropping for the first time in three sessions.

On the New York Mercantile Exchange, platinum futures for July delivery climbed 0.2 percent to $1,461.50 an ounce, rising for the third straight session. Palladium futures for June delivery advanced 1.2 percent to $610.80 an ounce.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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