Gold declined to the lowest in more than a week as a stronger dollar eroded demand for the precious metal as an alternative investment.
The dollar gained the most in more than two months against a basket of currencies after the International Monetary Fund said the world economy will grow 3.3 percent this year, the slowest pace since the 2009 recession. The region using the European currency will contract 0.4 percent this year, 0.1 percentage point worse than forecast in July, the IMF said. Gold rallied last week as central banks from the U.S. to Asia pledged to spur growth.
“The IMF forecast has taken some blush off the rose,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “We are seeing some move towards the dollar.”
Gold futures for December delivery fell 0.6 percent to settle at $1,765 an ounce as of 1:33 p.m. on the Comex in New York, after earlier slipping to $1,762, the lowest since Sept. 27. Bullion retreated 1.2 percent in the previous two sessions. The metal reached $1,798.10 on Oct. 5, the highest since Nov. 9.
The IMF’s 188 member countries convene in Tokyo this week as low growth damped by fiscal consolidation in the richest economies hurts developing counterparts from China to Brazil. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent.
Silver futures for December delivery dropped 0.1 percent to $33.985 an ounce on the Comex.
Platinum futures for January delivery fell 0.2 percent to $1,695.30 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery gained 0.2 percent to $658.20 an ounce.