Gold declined as European debt concerns eased, eroding the appeal of the precious metal as a haven asset. Silver, platinum and palladium also fell.
Billion for immediate delivery lost as much as 0.3 per cent to $US1,538.50 an ounce and traded at $US1,540.82 at 12:04 p.m. in Seoul. The August-delivery contract was little changed at $US1,541.90 an ounce on the Comex in New York.
“Gold is lackluster amid expectations there soon will be some sort of agreement on aid for Greece,” said Hwang Il Doo, a senior trader at KEB Futures Co. in Seoul. “Losses may be limited since there remains much uncertainty in the market.”
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Jean-Claude Trichet, president of the European Central Bank, or ECB, signaled yesterday that he may back Greek debt rollovers, helping the euro rise to a one-month high against the dollar. The common currency lost 0.2 per cent to $US1.4661 today after rallying 0.8 per cent yesterday. Gold has risen 8.5 per cent this year, reaching an all-time high of $US1,577.57 in May.
“Gold could see fresh interest if the ECB signals to keep rates on hold as precious metals benefit from a low interest rate environment,” Stefan Graber, an analyst at Credit Suisse Group AG, wrote in a report. “The overall direction of gold remains firmly up.”
All 51 economists forecast that the ECB will keep the benchmark rate at 1.25 per cent at a June 9 meeting, a Bloomberg survey showed. The central bank may increase borrowing costs by 25 basis points in July, a separate survey showed.
Silver for immediate delivery dropped as much as 1.2 per cent to $US36.7050 an ounce and was at $US36.88, more than double the price a year ago.
“Silver looks vulnerable as its performance is tied to risk sentiment, which is currently shaky,” Graber wrote.
Immediate-delivery platinum decreased 0.6 per cent to $US1,822.85 an ounce, while cash palladium lost 0.3 per cent to $US806.50 an ounce.
