Gold Set for Longest Slump Since May as Investors Return to Risk

  • Spot silver also heads for a second straight weekly decline
  • ETF gold holdings fell 1.05 tons to 2,004 tons Thursday

Gold headed for its first back-to-back weekly decline since May as gains in equity markets and the dollar sapped demand for the metal as a store of value.

The S&P 500 Index is on the verge of a fourth weekly advance, the longest run in four months, amid signs of a strengthening U.S. economy and speculation that central banks will act to cushion the fallout from the U.K.’s vote to leave the European Union. The world needs fiscal, monetary and structural measures, International Monetary Fund Managing Director Christine Lagarde said Friday in Beijing.

Gold has pared this year’s rally as traders begin to price in increasing odds of a U.S. rate increase this year. Higher borrowing costs reduce the appeal of precious metals because they don’t offer yields. Federal Reserve policy makers will meet next week.

“With continued equities strength and some additional dollar strength, we saw traders book profits in precious metals, mainly gold and silver,” Phil Streible, a senior commodity strategist at RJO Futures in Chicago, said in a telephone interview. “People are starting to think that thoughts of an interest-rate hike in the U.S. are working their way back into some of the Fed officials’ talks.”

Bullion for immediate delivery fell 0.6 percent to $1,323 an ounce at 1:54 p.m. in New York, set for a 1.1 percent loss this week, according to Bloomberg generic pricing. Gold futures for August delivery slipped 0.6 percent to settle at $1,323.40. Spot silver was set for the biggest weekly drop in two months.

  • AngloGold Ashanti Ltd. said it returned to profit in the first half thanks to higher prices, cost control and weaker currencies in countries where it operates. The shares rose as much as 3.4 percent and have almost tripled this year.
  • Holdings in gold-backed exchange-traded funds fell 1.05 metric tons to 2,004.4 tons on Thursday, data compiled by Bloomberg show.
  • Spot platinum slipped. Palladium is set for a fifth straight weekly advance, the longest since October.
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