Gold fell the most in a week as physical demand from India, last year’s biggest buyer, remained slack and a rebounding dollar eroded the appeal of the metal as an alternative investment.
Buying in India has “retreated,” UBS AG wrote today in a report. The U.S. Dollar Index extended gains after a report showed U.S. demand for goods such as machinery and electronics climbed in October by the most in five months. While gold rose 5.1 percent in September after the Federal Reserve announced stimulus measures to boost growth, such accommodative policies can’t be left in place forever, Fed Bank of Dallas President Richard W. Fisher said today in Berlin.
“The dollar strength is working against gold,” Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a telephone interview. “Also, the physical market looks quiet.”
Gold futures for December delivery fell 0.4 percent to settle at $1,742.30 an ounce at 1:44 p.m. on the Comex in New York, the biggest decline since Nov. 20. Prices dropped 0.1 percent yesterday, after reaching $1,755 on Nov. 23, the highest since Oct. 17.
Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,607 tons yesterday, data compiled by Bloomberg show.
Silver futures for March delivery slid 0.5 percent to $34.074 an ounce in New York, after reaching $34.37, the highest since Oct. 11.
On the New York Mercantile Exchange, platinum futures for January delivery rose 0.5 percent to settle at $1,618.50 an ounce. Palladium futures for December delivery climbed 1.1 percent to $668.20 an ounce.