BLBG: Gold Falls in Asia, Poised for Third Weekly Drop on Stock Rally
Gold fell in Asia, poised for a third weekly decline and the longest losing streak since October, as a rebound in equities reduced investor demand for a haven and deflation concerns persisted.
Asian stocks advanced, tracking the biggest three-day gain since November in U.S. equities, after crude oil prices surged and statements from Bank of America Corp. and General Electric Co. eased concern the financial crisis will deepen. The benchmark MSCI Asia Pacific Index is up 2.9 percent this week as bullion dropped 1.7 percent.
“Investment has been and is likely to remain the key to higher prices, and while the financial chaos should ensure it is well supported, a short-term dip is likely if the focus turns to deflationary economies, not collapsing banks,” VM Group analysts led by Carl Firman, wrote in a monthly report sponsored by Fortis.
Gold for immediate delivery fell as much as 0.5 percent to $922.28 an ounce, and traded at $924.60 at 9:25 a.m. in Singapore, paring gains made in the last two days.
April-delivery gold stood little changed at $924.90 an ounce in after-hours trading on the Comex Division of the New York Mercantile Exchange.
U.S. stocks gained yesterday after General Electric Co. said losing the top credit rating at Standard & Poor’s won’t hurt business and Bank of America Corp. said it’s profitable.
Assets in the SPDR Gold Trust, the biggest such fund backed by bullion, advanced 0.3 percent to a record 1,041.53 metric tons yesterday, according to figures on the company’s Web site. The fund’s holdings are now larger than the 1,040.1 tons held by Switzerland in January, according to Swiss National Bank data.
‘Buy ETFs’
“The best way to hold gold is to buy ETFs because you’re buying it in bulk, it’s traded through the exchange and you don’t have to deal with a counterparty,” Albert Cheng, the World Gold Council’s Far East managing director, said in a March 10 Bloomberg Television interview.
Among other precious metals for immediate delivery, silver was down 0.4 percent at $12.935 an ounce, palladium lost 0.4 percent to $198 an ounce, and platinum gained 0.7 percent to $1,056 an ounce.
