Gold Seen Falling as U.S. Equities Gain, Dollar RalliesDebarati Roy
Gold futures fell as U.S. equities climbed to a record and the dollar’s rally curbed demand for the metal as an alternative investment.
The Standard & Poor’s 500 Index of stocks topped 1,900 for the first time, and the greenback climbed to one-month high against the euro. Gold slumped 28 percent last year as equities surged to a record and inflation remained muted. Declines may be limited as escalating tensions in Ukraine spur haven demand.
“The equity market continues to rise and the dollar’s strength is making gold less popular,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “Some buyers, however, are picking up gold because of Ukraine.”
Gold futures for June delivery slipped 0.1 percent to $1,294.80 an ounce at 1:38 p.m. on the Comex in New York. Earlier, the price fell as much as 0.5 percent.
The metal rose 7.7 percent this year on the Eastern European crisis. “Terrorists” attacked a Ukrainian army convoy near the separatist-held city of Slovyansk, killing six people, Interfax reported, citing Ukraine’s Defense Ministry.
Today, UBS AG lowered its one-month gold forecast to $1,250 from $1,280 and cut its three-month outlook to $1,300 from $1,350. Holdings of the metal in exchange-traded products declined for eight straight weeks, data compiled by Bloomberg show.
Silver futures for July delivery rose less than 0.1 percent to $19.547 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for July delivery climbed 1 percent to $1,456 an ounce, the biggest gain since April 25.
Palladium futures for June delivery advanced 1.1 percent to $817.30 an ounce.
Holdings in ETPs backed by platinum and palladium have climbed to records, Bloomberg data show.
Lonmin Plc said it will push ahead with plans to break a 15-week strike tomorrow by reopening mines even after at least four people were killed in South Africa’s platinum-mining region in the past four days.