Gold Drops With Silver as Gains in Stocks and Dollar Cut Demand

  • Silver falls a fifth day, extending longest slump this year
  • Traders are seeing more chance of U.S. rate rise by December

The Case for Adding Precious Metals to Your Portfolio

Gold futures fell to a three-week low as gains in equities and a stronger dollar curbed demand for the metal as a store of value. Silver extended its longest run of losses in eight months, and shares of miners slid the most since November.

Investors pulled back from gold as positive earnings results from some of the world’s biggest companies helped push the MSCI All-Country World Index higher. The Bloomberg Dollar Spot Index touched a seven-week high amid rising odds of a U.S. interest-rate increase this year, curbing the appeal of precious metals, which don’t offer yields.

“The dollar’s strength continues to pressure most commodities, particularly gold,” David Meger, director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. “Safe-haven demand has been diminishing, obviously with equity markets moving to new record highs.”

Gold futures for August delivery slipped 1 percent to settle at $1,319.30 an ounce at 1:42 p.m. on the Comex in New York, the biggest loss in a week. Prices earlier touched $1,313.30, the lowest for a most-active contract since June 29.

Silver futures for September delivery declined 2 percent, the biggest loss for a most-active contract since May 19. Prices are down for a fifth straight session, the longest streak since Nov. 13.

In other precious metals news:

  • An index of 14 gold miners tracked by Bloomberg Intelligence dropped 8.7 percent, heading for the biggest loss since November. Shares of Toronto-based Barrick Gold Corp. were among the biggest decliners.
  • Holdings in exchange-traded funds backed by gold rose 1.2 metric tons to 2,006.1 tons as of Tuesday, data compiled by Bloomberg show.
  • Platinum futures slipped, while palladium gained on the New York Mercantile Exchange.
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