BLBG:Gold Declines as Stronger Dollar Curbs Investor Demand
Gold declined for the first time in three days in London as a stronger dollar curbed demand for the metal as an alternative investment.
The dollar gained against the euro amid concern the outcome of French presidential elections will disrupt efforts to stem the region’s debt crisis. The International Monetary Fund’s spring meetings ended yesterday in Washington, raising more than $430 billion in pledges to help safeguard the global economy.
“There’s the effect of the weaker euro and stronger dollar and that’s why we see gold under pressure,” Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said today by phone. “Physical demand is really very quiet.”
Bullion for immediate delivery fell 0.6 percent to $1,632.85 an ounce by 10:25 a.m. in London. Prices slipped 0.9 percent last week. June-delivery futures were 0.6 percent lower at $1,633.20 on the Comex in New York.
Holdings in bullion-backed exchange-traded products were little changed at 2,394.4 metric tons on April 20, about 0.7 percent below the March 13 record, data compiled by Bloomberg show. Prices are up 4.4 percent in 2012 after advancing for 11 consecutive years.
Christine Lagarde, managing director of the IMF, fell short of her original $600 billion goal as the U.S. declined to participate and Canada proposed making it harder for Europe to tap aid. In France, Socialist challenger Francois Hollande won more of the first-round vote than incumbent Nicolas Sarkozy.
“There just hasn’t been much interest in gold these days, and direction comes from all over including the dollar and stock markets,” Huang Mingchen, a trader at Wonder Futures Co., said from Hangzhou, China. “We’ll probably get another week of muted trading as markets digest the IMF meeting over the weekend, and before the Fed policy statement.”
The Federal Reserve will release a statement on monetary policy on April 25.
Silver for immediate delivery dropped 1.3 percent to $31.2875 an ounce. Palladium fell 1.3 percent to $666.50 an ounce after reaching a four-week high of $678.84 on April 20. Platinum was 0.7 percent lower at $1,569.13 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
