BLBG: Gold Tumbles to More Than Two-Month Low as Risk Appetite Grows
Gold dropped to its lowest in more than two months as investor risk appetite increased, reducing the metal’s appeal as a haven.
Bullion has tumbled 5 percent in three days on growing optimism that the world financial crisis may be easing. Asian stocks advanced for a fourth day after Federal Reserve Chairman Ben S. Bernanke said policy responses were helping to unfreeze credit markets.
The price decline is “likely reflecting diminished safe- haven interest,” David Moore, chief commodity strategist at Commonwealth Bank of Australia, wrote in an e-mail today. Some investors buy gold to preserve their wealth at times of financial crisis, selling when perceived risks have declined.
Gold for immediate delivery fell for a third day, sliding as much as 1.6 percent to $879.19 an ounce, the lowest since Jan. 29, before trading at $880.26 an ounce at 10:28 a.m. in Singapore. June-delivery gold dipped 1.7 percent to $881.40 an ounce on the Comex division of the New York Mercantile Exchange.
The metal has dropped 6.3 percent in the past month as the benchmark MSCI Asia Pacific Index surged 22 percent.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, declined for the first time since March 23. The fund held 1,127.37 tons of gold as of April 3, down from 1,127.44 tons April 2, a level which had been unchanged for four days.
Still, gold may rebound this week on concern that consumer prices may increase, spurring demand for the precious metal as a hedge against inflation.
Gold Survey
Twelve of 17 traders, investors and analysts, or 71 percent, surveyed by Bloomberg News said gold would climb. Four people, or 24 percent, forecast lower prices and one was neutral.
Prices of goods imported into the U.S. probably rose 0.9 percent in March, the first increase since July, according to the median estimate of 18 economists surveyed by Bloomberg News. The Labor Department report is set for release April 9.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended March 31 by 2 percent, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 154,859 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its Commitments of Traders report.
Among other precious metals for immediate delivery, silver tumbled 2.5 percent to $12.45 an ounce, platinum declined 0.7 percent to $1,151 an ounce, and palladium was little changed at $221 an ounce at 10:19 a.m. in Singapore.
