Gold, Silver Decline as Global Equities, Dollar Advance

Gold futures fell as a rally in global equities curbed demand for the precious metal as a store of value. Silver also dropped.

The MSCI All-Country World Index of stocks advanced as much as 0.6 percent, while the dollar rose for the second time in three sessions against a basket of major currencies. India, the world’s biggest consumer of gold, widened curbs on imports to narrow a record current-account deficit after shipments surged in the past two months.

“The stock market seems to be the winner today,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “Also, a stronger dollar and further restrictions in India are pushing prices lower.”

Gold futures for August delivery fell 1 percent to settle at $1,397.20 an ounce at 1:41 p.m. on the Comex in New York. Trading was 42 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.

Gold slid 17 percent this year as equities advanced amid speculation that the Federal Reserve may scale back U.S. monetary stimulus. Yesterday, holdings in exchange-traded products backed by the metal fell 3.6 metric tons to 2,144.7 tons, the lowest since May 2011, according to Bloomberg data.

Palaniappan Chidambaram, India’s finance minister, said yesterday that the country can’t afford high levels of gold purchases and that policies will be reassessed if needed. Demand for bars and jewelry surged after futures slumped into a bear market in April.

“Indian policy makers are keeping the pressure on gold imports,” Credit Suisse Group AG said in a report before the central-bank announcement. “Indian demand typically diminishes through June and July, and we note that June has historically been one of the two weakest months during the year for price.”

Silver futures for July delivery fell 1.4 percent to $22.409 an ounce on the Comex.

On the New York Mercantile Exchange, palladium futures for September delivery slid 1.1 percent to $751.05 an ounce. Platinum futures for July delivery dropped 0.4 percent to $1,491.10 an ounce.

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