BLBG: Gold Drops for Third Day as Rally to Record Prompts Selling
By Glenys Sim and Kim Kyoungwha
June 10 (Bloomberg) -- Gold declined for a third day as some investors sold the metal to lock in gains after it climbed to an all-time high, and haven demand falls after Japan raised an estimate for growth and China said exports surged.
Bullion for immediate delivery fell 0.3 percent to $1,229.38 an ounce at 1:27 p.m. in Singapore. The metal advanced to a record $1,252.11 an ounce on June 8. Gold futures for August delivery were little changed at $1,231.20 an ounce.
Japan’s economy, the world’s second-largest, rose at an annual 5 percent rate in the three months to March 31, faster than the 4.9 percent reported last month, the Cabinet Office said today. In China, exports jumped 48.5 percent in May, adding to signs that the recovery is on track.
“There will be some consolidation on the way up but it will be minor pullbacks,” Feng Liang, an analyst at GF Futures Co., said from Guangdong today. “The uptrend for gold is intact and investment demand from the flight to safety will continue to drive the rally.”
Europe’s debt crisis has driven the euro lower, bolstering demand for gold as investors seek to preserve their wealth. Second-quarter growth may be disappointing in Europe and there’s a possibility of a double-dip recession in some European countries, Andrew Burns, lead author of the World Bank’s Global Economic Prospects 2010 report, said via teleconference today.
Stocks Rebound
Gold prices have gained more than fivefold since 2000 on surging demand from investors seeking an alternative to currencies or a haven from financial turmoil. The metal has climbed 12 percent this year, heading for a 10th annual advance.
The MSCI Asia Pacific Index of regional shares advanced 0.8 percent today, the most in a week, bolstered by optimism that the global economic recovery is under way.
“I expect stock markets globally to rebound, which will put some down pressure on gold before a further rally,” said Wallace Ng, Hong Kong-based executive director at Fortis Nederland NV.
Silver for immediate delivery was little changed at $18.1225 an ounce, palladium gained 0.7 percent to $453.13 an ounce and platinum climbed 0.4 percent to $1,533.70 an ounce.
To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
