INTERNATIONAL. Gold may decline on speculation that a stronger dollar and an improving US economy will reduce the metal’s investment appeal. “Tactical investors have rapidly increased their exposure to gold over the past two months, and in turn this has supported the strengthening of the correlation between the dollar and gold,” Yingxi Yu, an analyst at Barclays Capital, said in a note. “Our expectations for the dollar to strengthen over the forthcoming weeks are likely to weigh upon prices,” Yu said. The US Dollar Index, a six-currency gauge of the greenback’s value, gained as much as 0.8%. Gold typically moves inversely to the currency. The index of US leading economic indicators rose 1.2% in the six months through May, adding to signs that the worst recession in five decades may end this year. Gold futures for August delivery slipped US$1.40, or 0.1%, to US$934.60 an ounce on the New York Mercantile Exchange’s Comex division Thursday. Bullion for immediate delivery was slightly up by US$1.2 to US$933.50 at 9.45am GMT Friday morning in London. “We have hit bottom for now, so we should see a strengthening dollar and weaker gold,” said Miguel Perez- Santalla, a Heraeus Precious Metals Management sales vice president in New York. Twelve of 22 traders, investors and analysts surveyed by Bloomberg News, or 55%, said bullion would drop next week, the second consecutive negative call. Eight people forecast higher prices and two were neutral. The weekly gold survey has forecast prices accurately in 156 of 266 weeks, or 59% of the time. “Investors are coming out of the cave of fear,” Jon Nadler, an analyst at Kitco Metals, said. As of yesterday, the dollar index was up 2.3% from this year’s low of 78.334 on 2 June, while it was still down 11% from a high of 89.624 reached on 4 March.

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