May 10 (Bloomberg) -- Gold capped the biggest drop in more than three weeks in New York as a stronger dollar curbed demand for the metal as an alternative investment.
The dollar reached a five-week high versus six major currencies today after data showed yesterday claims for U.S. jobless benefits unexpectedly dropped to the lowest in more than five years. Federal Reserve Bank of Philadelphia President Charles Plosser, who doesn’t vote on policy this year, told reporters yesterday that he favors reducing the central bank’s $85 billion in monthly bond purchases that were designed to stimulate the U.S. economy.
“The dollar is higher,” driving prices lower, Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “You had a Fed official talking about easing stimulus, and that drove currencies and precipitated the move lower in metals.”
Gold futures fell 2.2 percent to settle at $1,436.60 an ounce at 1:42 p.m. on the Comex in New York. That’s the biggest drop since April 15, when prices capped the biggest two-day loss in three decades. Assets in exchange-traded products gained 2.5 metric tons to 2,241.7 tons yesterday, the first increase since April 1, according to data tracked by Bloomberg. Global ETP assets have still declined 15 percent this year. Rising coin sales and demand for physical gold in Asia drove futures up 8.7 percent since reaching a two-year low of $1,321.50 on April 16.
“Gold’s been put a little bit under pressure because of the dollar move,” Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said today by telephone. “Physical-related demand had been very strong up to yesterday. The lower gold goes, the more physical demand will come in.”
Silver futures for July delivery fell 1.1 percent to $23.658 an ounce on the Comex, capping a weekly decline of 1.5 percent.
Palladium futures for June delivery slid 1.3 percent to $705.70 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery declined 2 percent to $1,486 an ounce. Prices are down 1 percent this week.
Anglo American Platinum Ltd., the top producer of the metal, may cut as many as 6,000 jobs at its South African mines, reducing an earlier plan that may have resulted in 14,000 losses. The new proposals will see three shafts in the Rustenburg region being idled rather than four, with production capacity to be cut by as much as 350,000 ounces, less than the 400,000 ounces first announced, the company said today in a statement.
To contact the editor responsible for this story: Claudia Carpenter at email@example.com