BLBG: Gold Falls as Gain to 3-Month High Deemed Overdone
Gold dropped on speculation that its rally to a three-month high prompted by investors who sought an alternative investment amid the global recession was overdone. Silver also fell after touching a three-month peak.
On Jan. 30, bullion reached $929.70 an ounce, the highest since Oct. 10, as holdings in the world’s biggest exchange-traded fund backed by bullion gained to a record, signaling increased demand for the metal as a haven. Investment in the SPDR Gold Trust reached a record 843.6 metric tons last week.
“The market appears to have slightly overbought,” Kazuhiko Saito, chief analyst at Tokyo-based commodities broker Fujitomi Co., said today by phone. “There was some selling interest over $930 an ounce.”
Gold for immediate delivery fell as much as 1.3 percent to $915.83 an ounce and was at $917.78 at 10:31 a.m. in Singapore.
The price rose 3.1 percent last week and added 5.2 percent in January, the third straight monthly advance, as U.S. stocks fell for the fourth straight week, capping the market’s worst January retreat.
Gold for April delivery was down 1 percent at $919.50 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange, while gold for December delivery on the Tokyo Commodity Exchange gained 1 percent to close at 2,659 yen a gram ($920 an ounce) by the 11:00 a.m. Tokyo time break.
The MSCI Asia-Pacific Index lost as much as 1.9 percent to 81.57 today after the Standard & Poor’s 500 Index slid 2.3 percent on Jan. 30, capping a fourth weekly drop. The Dow Jones Industrial Average dropped 1.8 percent to 8,000.86 on Jan. 30, driving its monthly loss to 8.8 percent.
Dollar Weakens
The dollar rose today against the euro, extending last month’s 8.3 percent gain. The U.S. currency was at $1.2724 as of 10:34 a.m. in Singapore from $1.2813 late in New York on Jan. 30.
The Institute for Supply Management’s factory index, due today, dropped to 32.5 in January from a revised reading of 32.9 the prior month, according to a Bloomberg News survey of economists. A reading of 50 is the dividing line between growth and contraction.
Silver for immediate delivery declined 1.5 percent to $12.485 an ounce at 10:33 a.m. Singapore time after touching $12.68 earlier, the highest since Oct. 1.
Among the platinum group metals, platinum lost 0.7 percent to $981.50 an ounce, and palladium was 0.4 percent higher at $194.25 an ounce.
