BLBG:Gold Extends Weekly Drop as Stimulus Expectations Curbed
Gold fell in London and headed for a second weekly decline as improving economic data from the U.S. to China damped speculation of more government stimulus, reducing demand for the metal as an alternative investment.
Data this week showed China’s industrial production, retail sales and fixed-asset investment accelerated in September, U.S. housing starts jumped to a four-year high and an index of American leading economic indicators rose in September by the most in seven months. Gold gained 11 percent in the third quarter after central banks in the U.S., China, Japan and Europe took action to stimulate growth.
“While I’m still intermediate-longer term bullish, I want to sit on the side for now,” Jim Pogoda, a trading consultant for New York-based Gold Bullion International, said yesterday in an e-mail. “Data from China were on balance eco positive, dampening hopes for sooner and more aggressive easing there. The U.S. data this week have been generally stronger, again lessening chances for further aggressive easing measures.”
Bullion for immediate delivery fell 0.5 percent to $1,732.28 an ounce by 9:26 a.m. in London. Prices are down 1.3 percent this week. December-delivery futures were 0.7 percent lower at $1,733.30 on the Comex in New York.
Holdings in gold-backed exchange-traded products gained 1.5 metric tons to 2,580.6 tons yesterday, data compiled by Bloomberg show. Assets reached a record 2,583 tons on Oct. 11 and are up 9.5 percent this year.
The euro headed for a weekly gain against the dollar as European leaders committed to their goal of creating a regional bank supervisor by year-end. The European Union will seek to agree on a framework that makes the European Central Bank the main bank supervisor by Jan. 1, according to conclusions released early today.
Silver for immediate delivery slipped 1.6 percent to $32.28 an ounce. Platinum fell 0.7 percent to $1,629.74 an ounce. Palladium declined 1.2 percent to $636 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
