BLBG: Gold May Decline in London as Advancing Equities Curb Demand
June 19 (Bloomberg) -- Gold, little changed today in London, may decline as an advance in equities reduces the metal’s appeal as an alternative investment.
European and Asian stocks gained as European Union leaders said the region is on course for a “sustainable” economic recovery and after better-than-estimated U.S. economic reports yesterday. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, was little changed today. Gold, which typically moves inversely to the U.S. currency, is down 0.6 percent this week as the dollar index has added 0.6 percent.
“Fundamentally, inflation expectations are not there just yet and the precious metal could see even more losses if equities bounce back up,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a note. “Gold’s attractiveness as a safe haven asset is virtually zero at the moment.”
Bullion for immediate delivery added 40 cents to $933.46 an ounce at 9:39 a.m. local time. The metal is heading for a third weekly drop, the longest declining streak since April 17. August gold futures lost 0.1 percent to $933.80 an ounce on the New York Mercantile Exchange’s Comex division.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has remained unchanged at 1,132.15 metric tons since June 5, the company’s Web site showed. That’s the longest period without a gain or retreat since November.
Gold “is likely to find further scaled-down support as investor dip-buying continues,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note. “We expect the dollar to provide further direction.”
Silver for immediate delivery in London was little changed at $14.2050 an ounce. Platinum rose 0.7 percent to $1,215.50 an ounce, and palladium was 0.1 percent higher at $240.68 an ounce.
Palladium held in ETF Securities Ltd.’s exchange-traded commodities rose to a record 319,451 ounces yesterday, from 309,420 ounces on June 16, according to the company’s Web site. Silver holdings fell to 20.02 million ounces from 20.198 million ounces on June 16.
