Gold dropped to a 10-week low in London on speculation the world financial crisis may be easing, reducing the precious metal’s appeal as a haven. Silver fell. Bullion has tumbled 5.2 percent in three days, wiping out this year’s gains, on expectations government efforts will revive the global economy. The MSCI World Index of shares has climbed 23 percent the past month as the metal has lost 6.5 percent. The biggest exchange-traded fund backed by gold fell for the first time in two weeks. “Risk appetite has increased further following the actions of various governments and central banks as well as the combined efforts of the G-20 nations last week,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a note today. “While scrap gold sales have eased over the past week, data has shown ETF demand has stalled.” Gold for immediate delivery slipped as much as $19.08, or 2.1 percent, to $874.08 an ounce and traded at $876.70 by 11:15 a.m. in London. The metal had risen as much as 14 percent this year. June futures lost 1.9 percent to $880.40 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division. The metal dropped to $879.50 in the morning “fixing” in London, used by some mining companies to sell production, from $905 at the afternoon fixing on April 3. The commodity is trading 15 percent below the record $1,032.70 set in March 2008. Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, declined for the first time since March 23. Assets in the fund fell to 1,127.37 tons as of April 3, down from 1,127.44 tons on April 2, a level that had been unchanged for four days. ‘Improved Tone’ Policies to unfreeze credit markets are working, U.S. Federal Reserve Chairman Ben S. Bernanke said April 3. Leaders from the Group of 20 nations pledged last week more than $1 trillion in emergency aid to help curb the worldwide slump, and said revenue from proposed International Monetary Fund gold sales will be used to help support the world’s poorest countries. Plans announced a year ago to sell 403.3 tons of bullion still require U.S. Congressional authorization. “An improved tone for equities seems to be holding back gold since it means less safe haven buying,” London-based broker ODL Securities Ltd. said today in a report. “Some analysts also mentioned concerns about potential IMF sales of gold as a possible bearish influence.” Gold Survey Still, gold may rebound this week on speculation rising prices of goods will revive demand for bullion as an inflation hedge, according to 12 of 17 traders, investors and analysts surveyed by Bloomberg. Four said to sell and one respondent was neutral. Hedge-fund managers and other large speculators increased their net-long position in New York gold futures by 2 percent in the week ended March 31, 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. “Scrap supply is much lower since gold fell below $930” an ounce and “patchy jewelry demand was seen late last week when gold was near the week’s lows,” said UBS AG analyst John Reade. “This morning our traders report Indian clients calling to buy gold” because “it is now cheap,” he said. Among other metals for immediate delivery in London, silver dropped 2.1 percent to $12.5025 an ounce, the lowest since Feb. 3. Platinum slipped 0.7 percent to $1,151.75 an ounce, and palladium added 1.8 percent to $224.50 an ounce.

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