BLBG:Gold Set to Decline a Second Day in London as Dollar Rebounds
Gold headed for a second consecutive decline in London as a rebounding dollar curbed demand for an alternative investment and physical demand from India, last year’s biggest buyer, remained slack.
The U.S. Dollar Index, a measure against six major trading partners, fell to near a three-week low earlier today after euro-area finance chiefs and the International Monetary Fund agreed to cut Greece’s interest rates and gave it more time to pay back rescue loans. The gauge rebounded as Federal Reserve Bank of Dallas President Richard W. Fisher said accommodative policies can’t be left in place forever. Gold demand in India has “retreated,” UBS AG wrote today in a report.
“Physical players will, in our view, remain cautious until the greenback resumes its downtrend,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. “With no support from the physical side, bullion might struggle to make significant progress with fairly sticky global exchange- traded-product holdings remaining largely unchanged near record highs.”
Gold for immediate delivery fell 0.1 percent to $1,746.37 an ounce by 11:18 a.m. in London. Prices reached $1,754.65 on Nov. 23, the highest since Oct. 15. Gold for December delivery was down 0.2 percent at $1,746.50 on the Comex in New York.
Gold at the morning “fixing,” used by some mining companies to sell output, declined to $1,747.25 an ounce in London from $1,750.50 yesterday afternoon.
Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,607 tons yesterday, data compiled by Bloomberg show. The U.S. Mint sold 75,500 ounces of American Eagle gold coins so far this month, the most since January, data on its website show.
Silver for immediate delivery fell 0.4 percent to $34.0175 an ounce, after reaching $34.285, the highest since Oct. 11. Platinum was 0.3 percent higher at $1,617.38 an ounce. Palladium rose 0.7 percent to $668.75 an ounce. It reached $672.75, the highest since Oct. 5.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
