Gold Drops for a Second Day as Weakening Euro Curbs Demand From Investors
Gold fell for a second day in London as the euro’s decline curbed demand for precious metals as an alternative to currencies. Silver retreated 1.6 percent.
The euro dropped as much as 0.5 percent against the dollar amid speculation European government debts will derail growth. Gold was unable to extend gains from a record $1,300.15 an ounce yesterday, contributing to selling, said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva.
“The euro is under pressure,” Nabavi said. Gold may drop to the “low $1,280s” as early as today, he said.
Gold for immediate delivery fell $6.03, or 0.5 percent, to $1,288.32 an ounce at 8:55 a.m. local time. Gold futures for December delivery dropped 0.8 percent to $1,288 an ounce on the Comex in New York.
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,300.52 metric tons as of yesterday, according to figures on the company’s website. Major holders include billionaire John Paulson’s New York-based Paulson & Co.
Gold is “a great asset for people who are rich and who want to stay rich,” said Graham Birch, a former manager of BlackRock Inc.’s BGF World Gold Fund, at the London Bullion Market Association conference in Berlin yesterday.
Gold prices gained this year even as U.S. inflation slowed. Bullion is traditionally bought as a hedge against rising consumer prices.
Silver dropped as much as 1.6 percent and was last down 1.3 percent at $21.1388 an ounce. Platinum declined 1.3 percent to $1,611 an ounce and palladium lost 1.4 percent to $544.50 an ounce.
To contact the editor responsible for this story: Claudia Carpenter at firstname.lastname@example.org.