BLBG:Gold To Fall As Stronger Dollar Curbs Investment Demand
Gold was set to decline in New York on speculation some investors will sell the metal after prices rallied above $1,700 an ounce and before European Central Bank policy makers meet.
Gold futures reached $1,701.60 an ounce yesterday, the highest since March 13. The dollar was little changed versus the euro before the ECB meets tomorrow to discuss measures to tackle the region’s debt crisis. President Mario Draghi told lawmakers in a closed-door session in Brussels this week the bank’s primary mandate compels it to intervene in bond markets to ensure the euro’s survival.
“Gold is finding strong resistance on approach of $1,700, with the market keen to sell on approach of this level,” Walter de Wet, the head of commodities research at Standard Bank Plc, wrote today in a report. “We expect very little from the metal ahead of tomorrow.”
Gold for December delivery fell 0.2 percent to $1,692.50 an ounce by 7:50 a.m. on the Comex in New York. Immediate-delivery bullion was 0.3 percent lower at $1,690.45 in London.
Bullion’s 14-day relative-strength index was at 69.6 today, near a level of 70 that indicates to some analysts who study such charts that a drop in prices may be imminent. Holdings in gold-backed exchange-traded products gained 7.9 metric tons to a record 2,467.8 tons yesterday, data compiled by Bloomberg show.
Gold is set to climb above $1,800 by the end of this year as central banks’ actions to stoke economic growth boost investment to a record in the second half, Thomson Reuters GFMS said in a report yesterday. Bloomberg competes with Thomson Reuters in selling financial and legal information and trading systems.
Silver for December delivery fell 0.7 percent to $32.175 an ounce after reaching $32.47 yesterday, the highest level since April 12. Platinum for October delivery was 0.4 percent lower at $1,561 an ounce after climbing to a four-month high of $1,571. Palladium for December delivery was down 0.4 percent at $638.75 an ounce.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
