Gold Decline Pares Best Week Since 2011 as Dollar StrengthensDebarati Roy and Nicholas Larkin
Gold fell as a stronger dollar curbed demand for an alternative investment, narrowing the biggest weekly gain since October 2011 after Federal Reserve Chairman Ben S. Bernanke called for maintaining stimulus.
Bullion jumped 5.5 percent in the previous four days, the best run since March. On July 10, Bernanke said that the U.S. needs “highly accommodative monetary policy for the foreseeable future.” The Bloomberg Dollar Index, which tracks the greenback against 10 major trading partners, rose as much as 0.6 percent. Gold slumped 23 percent last quarter.
“The dollar is pushing gold down,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The overall trend remains weak.”
Gold futures for August delivery slipped 0.2 percent to settle at $1,277.60 an ounce at 1:43 p.m. on the Comex in New York. It reached $1,297.20 yesterday, the highest since June 24, and advanced 5.4 percent this week.
Gold has tumbled 24 percent this year, wiping $60.4 billion from the value of gold exchange-traded product holdings, after some investors lost faith in the metal as a store of value and amid speculation that the Federal Reserve will end its stimulus program.
Silver futures for September delivery fell 0.8 percent to $19.792 an ounce in New York, cutting the weekly gain to 5.6 percent, still the most since November. It’s the worst performer in the Standard & Poor’s GSCI Spot Index of 24 commodities this year.
On the New York Mercantile Exchange, platinum futures for October delivery slipped less than 0.1 percent to $1,406.90 an ounce. Palladium futures for September delivery gained 0.7 percent to $722.90 an ounce.