BLBG: Gold Drops for Third Consecutive Day as Dollar Gains, Asian Stocks Decline
Gold retreated for a third day as an advance in the dollar curbed demand for commodities, including precious metals.
Gold for immediate delivery declined 0.4 percent to $1,221.15 an ounce at 2:34 p.m. in Singapore. December-delivery futures fell 0.5 percent to $1,222.80 an ounce.
“We will continue to see lower gold prices,” said Wallace Ng, Hong Kong-based executive director with ABN Amro Securities Asia Ltd. “It is following the weakness of general markets, like stocks, commodities and energy.”
The Dollar Index, a six-currency gauge of the dollar’s value, climbed for a fourth day. Gold typically moves inversely to the dollar. The Reuters/Jefferies CRB Index of 19 commodities dropped for a fourth day yesterday as the U.S. struggles to recover from the worst recession since the Great Depression.
Asian stocks and commodities including oil fell today before reports forecast to show the U.S. housing market is slowing and German business confidence dropped.
Gold has strengthened 11 percent this year, touching a record in June, and is set for a 10th straight annual advance.
“Gold may be caught in the cross-fire should evidence of an economic slowdown prompt a sell-off of equities and commodities,” said Ong Yi Ling, Singapore-based investment analyst with Phillip Futures Pte. “We may see gold retrace to $1,215 before prices rebound on safe-haven flows.”
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,299.47 metric tons yesterday, the company’s website showed. Holdings are 1.6 percent below June’s record of 1,320.44 tons.
Physical demand from India, the world’s largest gold consumer, may limit price declines in the weeks ahead as the festival season gets under way, according to a report yesterday from Commerzbank AG.
Today marks the start of the season with Raksha Bandhan, in which gold is given as a gift, Eugen Weinberg, head of commodity research at Commerzbank, wrote in the report.
Silver for immediate delivery declined 0.4 percent to $17.915 an ounce, platinum dropped 0.7 percent to $1,499.75 an ounce and palladium shed 1.4 percent to $476.75 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
