Gold Drops From Two-Month High as Stronger Dollar Crimps Demand
Gold dropped from a two-month high as a stronger dollar reduced demand for the precious metal as an alternative investment.
The Bloomberg Dollar Index, a gauge against 10 major currencies, rose as much as 0.3 percent. Gold prices have fallen 17 percent this year as the greenback climbed 4.2 percent and amid concern that the Federal Reserve will begin cutting its stimulus measures. Minutes released on Aug. 21 showed policy makers were comfortable with Fed Chairman Ben S. Bernanke’s plan to taper this year if the economy strengthens.
“The strength in the dollar is keeping gold weak,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “People want clarity from the Fed on the timing of the tapering.”
Gold futures for December delivery fell 0.2 percent to settle at $1,393.10 an ounce at 1:41 p.m. on the Comex, after jumping to $1,407, the highest since June 7.
Trading was 47 percent below the average for the past 100 days for this time, data compiled by Bloomberg showed.
Gold rose 70 percent from December 2008 to June 2011 as the U.S. central bank pumped more than $2 trillion into the financial system by purchasing debt, increasing investors’ concern about currency debasement and accelerating inflation
Silver futures for December delivery climbed 1.2 percent to $24.055 an ounce on the Comex, after reaching $24.465, the highest since April 30. Last week, the metal advanced 1.8 percent, the fifth straight gain and the longest rally since September.
Platinum futures for October delivery added 0.2 percent to $1,544.50 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery slid 0.6 percent to $746.05 an ounce.
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