BLBG:Gold Posts Biggest Two-Day Slump in Seven Weeks on Rescue Plan for Greece
Gold fell, capping the biggest two- day drop in seven weeks, as a pledge by European Union leaders to stabilize the region’s economy slashed demand for the precious metal as a haven.
EU leaders vowed to stave off a Greek default as long as Prime Minister George Papandreou pushes through a package of budget cuts next week. The dollar headed for the third straight weekly advance against the euro, eroding the allure of gold as an alternative investment. A tumble in energy costs yesterday reduced demand for the metal as an inflation hedge.
“Gold is losing the flight-to-quality bid in the near term as the leaders are working toward overcoming the Greek hurdle,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago.
On the Comex in New York, gold futures for August delivery fell $19.60, or 1.3 percent, to close at $1,500.90 an ounce at 1:45 p.m., the lowest settlement since May 19. In two days, the metal slumped 3.4 percent, the most since May 5.
Earlier, gold touched $1,498.50, the lowest intraday price since May 20. The most-active contract declined 2.5 percent this week.
The metal closed below its 50-day moving average for the first time since February. Some analysts and investors study historical charts to predict price changes.
Gold has gained 5.6 percent this year. The price reached a record $1,577.40 on May 2 as Greece’s debt crisis and record-low U.S. borrowing costs boosted demand for an alternative to currencies.
Silver Drops
Silver futures for September delivery declined 36.6 cents, or 1 percent, to $34.65 an ounce. This week, the price dropped 3.1 percent. The metal has gained 12 percent in 2011.
Platinum futures for October delivery fell $17, or 1 percent, to $1,680.50 an ounce on the New York Mercantile Exchange. Earlier, the price touched $1,678.50, the lowest since March 17. The metal, down 4.1 percent this week, has declined 5.5 percent in 2011.
Palladium futures for September delivery slumped $11.85, or 1.6 percent, to $731.50 an ounce. Earlier, the price touched $731.10, the lowest since May 24. The commodity, down 1.9 percent this week, has declined 8.9 percent in 2011.
To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
