BLBG: Gold Falls in New York on Deflation Outlook; Silver Declines
Gold fell, erasing earlier gains, on concern the recession will deepen, reducing demand for commodities, including precious metals. Silver also declined.
U.S. stocks fell for a second day, and the Reuters/Jefferies CRB Index of 19 commodities headed for the third decline this week. First-time claims for U.S. unemployment benefits rose more than forecast, and the European Central Bank reduced its main refinancing rate to help stimulate growth.
“The stock markets have plummeted again and dragged down commodities and all the metals,” said Tom Hartmann, a commodity analyst at AltaVest Worldwide Trading Inc. in Mission Viejo, California. “There is deflation. All prices are falling.”
Gold futures for February delivery fell $1.30, or 0.2 percent, to $807.50 an ounce at 10:49 a.m. on the Comex division of the New York Mercantile Exchange, after earlier touching $822.10. The price declined 5.4 percent in the previous three sessions.
Silver futures for March delivery dropped 1.5 cents, or 0.1 percent, to $10.46 an ounce on the Comex. The metal slumped 24 percent in 2008.
