Gold Drops Most in a Week as Stronger Dollar Damps Metal DemandDebarati Roy and Glenys Sim
Gold fell the most in a week, dropping below $1,300 an ounce, after the dollar extended gains and as imports slumped in India, the world’s biggest consumer.
The Bloomberg U.S. Dollar Index, a gauge against 10 major trading partners, rose to a one-week high, curbing demand for the precious metal as an alternative asset. Purchases of gold and silver by India were worth $800 million in September compared with $4.6 billion a year earlier, the Commerce Ministry said today.
“The dollar is the winner today,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Prices are under pressure as physical demand has taken a hit.”
Gold futures for December delivery fell 1.3 percent to settle at $1,307.20 an ounce at 1:39 p.m. on the Comex in New York the biggest drop since Oct. 1. Earlier, prices touched $1,294.60, the lowest since Oct. 2.
The Federal Reserve is scheduled today to release minutes of last month’s meeting, when policy makers unexpectedly refrained from reducing monetary stimulus. Bullion slumped 22 percent this year on concern that the central bank will taper its $85 billion of monthly bond purchases as the economy improves.
Janet Yellen, the Fed vice chairman and an architect of its stimulus program, will be nominated to succeed Ben S. Bernanke, a White House official said in an e-mailed statement.
The U.S. government shutdown has halted the release of economic reports, including payrolls data on Oct. 4, as lawmakers remained deadlocked over a budget impasse and a plan to raise the country’s debt limit.
Silver futures for December delivery fell 2.5 percent to $21.891 an ounce.
On the New York Mercantile Exchange, platinum futures for January delivery fell 1.5 percent to $1,383 an ounce, ending a three-session advance. Palladium futures for December delivery slipped 1.5 percent to $704.10 an ounce.