BLBG: Gold Drops From One-Month High as Investors Sell to Raise Cash
By Jae Hur
Nov. 24 (Bloomberg) -- Gold declined after touching a one- month high on speculation last week's gain will spur investors to sell the metal to raise funds and cover losses in other markets, including equities.
Bullion fell as much as 1 percent today after rising 7.4 percent on Friday and 7.9 percent last week, the biggest such advance since September 19. The Standard & Poor's 500 Index lost 8.4 percent last week and 17.4 percent so far in November.
``We'll probably find support around $790 an ounce,'' and if that breaks, the price may head toward $783, said Darren Heathcote, head of trading at Investec Bank Ltd. ``We're seeing profit-taking'' after the jump on Friday, he said.
Gold for immediate delivery lost 0.7 percent to $794.67 an ounce at 10:43 a.m. in Singapore after touching $806.85, the highest since Oct. 20. Silver for immediate delivery fell 1.1 percent to $9.56 an ounce after surging 7.8 percent Nov. 21.
There's been buying from the physical side, Heathcote said. There's ``been a bit more asset class diversification to gold again recently,'' he said.
The dollar fell against the euro and crude oil jumped on Friday, boosting gold's appeal as an alternative investment.
The U.S. currency was little changed at $1.2623 per euro after dropping 1.1 percent Nov. 21. Crude oil advanced as much as 2.8 percent to trade above $51 a barrel on speculation further production cuts by the Organization of Petroleum Exporting Countries will prevent a glut in supplies.
Gold for December delivery rose 0.5 percent to $796.10 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. The Tokyo Commodity Exchange was closed for a public holiday in Japan.
Eighteen of 40 traders, investors and analysts surveyed from Mumbai to Chicago on Nov. 20 and Nov. 21 advised selling gold, which rose 6.6 percent last week to $791.80 an ounce in New York. Seventeen said to buy, and five were neutral.
Immediate-delivery platinum was 0.2 percent lower at $828 an ounce after gaining 6.3 percent Nov. 21. The metal lost 1.7 percent last week, declining for the second straight week. Palladium for immediate delivery fell 2.4 percent to $181 an ounce.
To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net
