Gold Drops as Higher Stocks, Stronger Dollar Curb Haven Demand

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Gold declined as higher stocks and a stronger dollar curbed haven demand for precious metals. Palladium tumbled to the lowest in almost five years.

Bullion for immediate delivery retreated 0.4 percent to $1,150.38 an ounce at 5:31 p.m. in Singapore, according to Bloomberg generic pricing. Palladium dropped as much as 7.1 percent to $533.55 an ounce, the lowest since Sept. 21, 2010.

European shares rallied with U.S. stock-index futures, as the Bloomberg Dollar Spot Index advanced 0.1 percent. Gold prices declined 0.5 percent on Monday even as investors boosted gold exchange-traded products holdings by 0.3 percent as $2.7 trillion was wiped from global equities.

“No safe haven, or no alternative asset demand for gold yesterday and not today either,” Ole Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by phone. “Gold is struggling to perform.”

Investors are turning to haven assets such as the Japanese yen, Swiss franc, bonds, U.S. Treasuries and German bunds, Bernard Aw, a Singapore-based strategist at IG Ltd., said in an interview.

Gold futures for December delivery dropped 0.3 percent to $1,150.30 an ounce on the Comex after retreating 0.5 percent on Monday. Bullion of 99.99 percent purity lost 0.7 percent to 237.86 yuan a gram ($1,153.90 an ounce) after rising to 239.58 yuan on Monday on the Shanghai Gold Exchange, the highest close since May 25.

Palladium dropped 3.3 percent to $555.40 an ounce after slumping 8.1 percent the past two days. The decline isn’t fundamentally driven, Hansen said. “It’s a long liquidation phase that seems to be not over yet in some of the smaller metals,” he said.

Silver for immediate delivery climbed 0.4 percent to $14.8245 an ounce after plunging 3.6 percent on Monday. Platinum rose 0.1 percent to $992.85 an ounce.

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