BLBG:Gold Declines to One-Week Low With Silver Before Europe Meeting
Gold dropped to a one-week low as commodities fell on speculation the euro-zone debt crisis will continue to damp demand for raw materials. Silver tumbled to the cheapest since Sept. 26.
Spot gold fell as much as 0.8 percent to $1,766.80 an ounce, the lowest intraday level since Oct. 1, and traded at $1,767.75 as of 3:28 p.m. Singapore time. Silver slumped as much as 2.2 percent to $33.775 an ounce and traded at $33.8962. Platinum and palladium declined at least 1.7 percent.
European finance ministers will meet in Luxembourg today, while German Chancellor Angela Merkel visits Greece tomorrow for the first time since the crisis erupted. German data today may show industrial production and exports fell, adding to evidence Europe’s debt crisis is damping growth and weakening the euro. The Standard & Poor’s GSCI Spot Index of 24 commodities fell 0.8 percent, curbing the rally that followed stimulus announcements from the U.S., Europe and Japan.
“All asset classes are now focusing on quantitative easing from major central banks and gold is no exception, thus behaving more like a risky asset and less like a safe haven,” said Stefan Graber, an analyst at Credit Suisse Group AG in Singapore. “It may take several attempts for gold to break $1,800, key technical resistance,” Graber said.
Gold gained 0.5 percent last week after trading at an 11- month high of $1,796.10. The U.S. unemployment rate unexpectedly dropped to 7.8 percent from 8.1 percent, easing pressure on the Fed to expand monetary stimulus that underpinned the bullion’s 4.7 percent gain last month.
Prime Beneficiary
Bullion for December delivery fell 0.7 percent to $1,769.10 an ounce on the Comex in New York. If Comex prices break above $1,800, they may rally toward $1,920, said Ed Meir, an analyst at New York-based INTL FCStone Inc. Futures reached a record $1,923.70 on Sept. 6, 2011.
In China, spot gold of 99.99 percent purity fell as much as 0.6 percent to 357.90 yuan a gram ($1,771 an ounce) on the Shanghai Gold Exchange, and was at 358.25 yuan. Volumes for the benchmark contract on the country’s largest cash bullion market were 5,686 kilograms on Sept. 28. The market was shut last week for the National Day holiday.
Holdings in exchange-traded products expanded 4.1 metric tons, or 0.2 percent, to a record 2,569.586 tons as of Oct. 5, according to data compiled by Bloomberg. The amount increased 24.2 tons last week. Cash palladium dropped 1.7 percent to $650.45 an ounce and platinum retreated 1.7 percent to $1,679.50 an ounce.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
