BLBG: Gold, Little Changed, May Rise as Weaker Dollar Revives Demand
June 23 (Bloomberg) -- Gold, little changed in New York and London today, may gain as a weaker dollar revives demand for the precious metal as an alternative investment.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell as much as 0.7 percent after yesterday adding the most in a week. The precious metal, which earlier slid to the lowest in six weeks, typically moves inversely to the dollar.
“The U.S. currency continues to dictate direction,” Andrey Kryuchenkov, a VTB Capital analyst in London, said today in a note. “Trade in our view will remain subdued until the Federal Reserve meeting on Wednesday.”
Gold futures for August delivery rose $2.40, or 0.3 percent, to $923.40 an ounce by 8:44 a.m. on the New York Mercantile Exchange’s Comex division. The contract earlier fell as much as 0.9 percent to the lowest since May 11. Bullion for immediate delivery in London added $1.95, or 0.2 percent, to $924.65 an ounce.
The metal increased to $920.25 in the morning “fixing” in London, used by some mining companies to sell production, from $919.25 at yesterday’s afternoon fixing. London spot prices have declined the past three weeks after four weeks of gains.
Gold futures dropped the most in more than a week yesterday as some investors sold the metal to cover losses in equity markets. The MSCI World Index of shares today fell to the lowest in four weeks after the World Bank yesterday projected the global economy would shrink this year by 2.9 percent, more than its previous forecast for a 1.7 percent contraction.
Fed Meeting
Federal Reserve policy makers start a two-day policy meeting today. The central bank has held its benchmark interest rate near zero since December.
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, slipped to 1,131.24 metric tons yesterday from 1,132.15 tons on June 19, the company’s Web site showed.
The reduction in ETF holdings “is a signal that investors aren’t keen to hoard gold,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a note.
Silver for July delivery in New York rose 0.9 percent to $13.83 an ounce in New York. Platinum for July added 0.1 percent to $1,170.40 an ounce, and palladium for September was 0.9 percent higher at $236 an ounce.
Platinum held in ETF Securities Ltd.’s exchange-traded commodities fell 1.2 percent to 338,982 ounces yesterday from 343,196 ounces on June 19, according to the company’s Web site.
