Gold declined in New York, trimming a monthly advance, as some traders booked profits after prices climbed to a 17-week high and amid speculation a weaker yuan may hurt demand from China.
Gold is the third-biggest gainer, after coffee and lean hogs, in the Standard & Poor’s GSCI gauge of 24 commodities this year on speculation haven demand increased after U.S. data that missed estimates added to concern the recovery may be faltering just as the Federal Reserve tapers bond buying. The precious metal is up 10 percent in 2014. China’s yuan slid the most on record and India raised the benchmark gold import price.
“Gold has been moving higher in terms of all currencies in recent days and weeks but it has gotten a bit over-bought in the shortest of terms,” economist Dennis Gartman said in his daily report today. Weakness in gold is “a gathering of gold’s forces before it moves higher again,” he wrote.
Gold for April delivery slid 0.3 percent to $1,328.20 an ounce by 7:32 a.m. on the Comex in New York on trading volumes that were 11 percent lower than the average for the past 100 days for this time of day. Bullion for immediate delivery fell 0.2 percent to $1,328.17 an ounce in London. Prices are up 6.8 percent this month, the most since July, and reached a 17-week high of $1,345.46 on Feb. 26.
Data tomorrow and March 3 may show more slowing in China, and lawmakers will meet next week to decide on economic policies. The yuan slid as much as 0.86 percent to a 10-month low of 6.1808 per dollar in Shanghai, the biggest intraday loss in China Foreign Exchange Trade System prices going back to 2007.
“Chinese flight to quality is likely to be strong, but weak renminbi could dent Chinese gold imports,” Bjarne Schieldrop, chief commodity analyst at SEB AB in Oslo, said by e-mail. Net gold imports from Hong Kong by China, the world’s largest buyer, were 83.6 metric tons in January, down from 91.9 tons in December and compared with 19.6 tons a year earlier. Chinese buyers may view current prices as being too high, Sharps Pixley Ltd., a brokerage handling physical bullion in London, said in a report today.
Gold holdings in exchange-traded products climbed 0.4 percent in February, the first increase in 14 months, data compiled by Bloomberg show. They declined last year for the first time since the product was introduced in 2003.
Silver for May delivery gained 0.2 percent to $21.31 an ounce, poised for an 11 percent advance in February.
Platinum for April delivery slid 0.2 percent to $1,450.30 an ounce, trimming a third monthly increase, while palladium for June delivery gained 0.1 percent to $744.50 an ounce.