BS: Gold, Little Changed, May Rise as Price Slump Attracts Buyers
July 28 (Bloomberg) -- Gold, little changed in New York, may gain as the lowest prices in almost three months spur demand.
Futures yesterday fell the most in more than three weeks, dropping as low as $1,160.80 an ounce, as a rally in global equities eroded demand for bullion as an alternative investment. Physical demand for gold from buyers in India, China and the wider Asian region was “very visible” as prices declined this week, UBS AG said today.
“From a risk-reward perspective, this level presents a buying opportunity,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland.
Gold futures for December delivery rose $1.40 to $1,163.20 at 10:19 a.m. on the Comex in New York. Before today, gold gained 6 percent this year and touched a record $1,266.50 an ounce on June 21.
Holdings in the SPDR Gold Trust, the world’s biggest gold- backed exchange-traded fund declined for a second day yesterday. Assets under management have dropped 1.5 percent this month, heading for the biggest decline since January.
“Any and all support for gold has been broken,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. Long-term investors “now have several months of strong overhead resistance to overcome before they regain the upper hand.”
Indian Demand
The drop in prices may be attractive to jewelers and consumers in India, analysts said.
Yesterday and July 26 were the UBS sales desk’s strongest two days since January for selling to India by volume, analyst Edel Tully said today in an e-mailed report.
“The current decline in the gold price is probably only short-lived,” Eugen Weinberg, the head of commodity research with Commerzbank AG, wrote in a report yesterday. “There are some religious holidays from the end of August” in India, the world’s largest gold consumer, which may propel demand, he said.
Silver futures for September delivery fell 15.6 cents, or 0.9 percent, to $17.47 an ounce on the Comex.
Platinum futures for October delivery rose $6.10, or 0.4 percent, to $1,542.80 an ounce on the New York Mercantile Exchange.
Palladium futures for September delivery gained $2.30, or 0.5 percent, to $468.85 an ounce.
--Editors: Daniel Enoch, Michael Arndt.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
