June 12 (Bloomberg) -- Gold futures rose in New York as the dollar declined for a third straight day, increasing demand for the precious metal as an alternative investment.
The dollar fell as much as 0.4 percent against a basket of six currencies today. Stocks fell, extending a rout that wiped out about $400 billion from the value of global equities yesterday.
“The weak dollar is providing support to gold,” said Adam Klopfenstein, a senior market strategist at Archer Financial Inc. in Chicago. “There is also some safe-haven buying after the selloff in the equity markets because of growth concerns.”
Gold futures for August delivery climbed 1.1 percent to settle at $1,392 an ounce at 1:48 p.m. on the Comex in New York.
Trading was 40 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
Prices have fallen 17 percent this year as some investors lost faith in the precious metal as a store of value and an improving U.S. economy increased speculation that the Federal Reserve may taper quantitative-easing measures that helped bullion to a 12-year bull run through 2012.
The Bank of Japan yesterday refrained from adding stimulus or expanding its toolkit for tackling volatility in bonds.
Newcrest Mining Ltd., Australia’s largest gold producer, said last week it will write down the value of its assets by as much as A$6 billion ($5.7 billion) after the slump in prices.
Gold will continue to decline over the medium term on a re-acceleration in U.S. growth and a further unwinding of exchange-traded-fund positions, Goldman Sachs Group Inc. said in a report today. The bank sees the metal trading at $1,345 in 12 months.
Holdings in exchange-traded products fell 2.3 metric tons to 2,127.5 tons yesterday, the lowest since April 2011, according Bloomberg data.
Silver futures for July delivery rose 0.7 percent to $21.796 an ounce in New York.
On the New York Mercantile Exchange, platinum futures for July delivery climbed 0.2 percent to $1,482.30 an ounce.
Palladium futures for September delivery advanced 0.6 percent to $757.05 an ounce. Trading was 64 percent below the 100-day average, according to Bloomberg data.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org