BLBG:Gold Falls as Strengthening Dollar Encourages Investors to Sell
Gold fell in London, paring a first weekly gain in seven, as a stronger dollar curbed demand for an alternative investment and spurred some investors to sell the metal. Bullion priced in yen rallied to a record.
The U.S. Dollar Index, a measure against six currencies, rose for a third session in four. Gold usually moves inversely to the greenback. The yen reached the lowest level since June 2010 against the dollar as Japan’s government pledged 10.3 trillion yen ($116 billion) in spending to drive a rebound.
“Keep an eye on the dollar for short-term direction,” David Govett, head of precious metals at Marex Spectron Group in London, said in a report. “We may see some liquidation today ahead of the weekend.”
Gold for immediate delivery slid 0.4 percent to $1,669.16 an ounce by 10:17 a.m. in London. Prices yesterday touched $1,678.81, the highest level since Jan. 3. Gold for February delivery dropped 0.5 percent to $1,669.10 an ounce on the Comex in New York.
Bullion is 0.8 percent higher this week in London, set to end the worst run of weekly losses since 2004 as signs of increased demand in China outweighed concern that an end to stimulus in the U.S. this year will bolster the dollar. Consumer prices in China gained 2.5 percent last month, exceeding analysts’ estimates.
“We have had a good run to the upside, and some profit- taking is now seen,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “News is positive and will help to turn sentiment around, but it will probably take some time.”
The metal for December delivery jumped 2.2 percent to a record 4,820 yen a gram ($1,679 an ounce) in Tokyo as investors sought to hedge against a weakening yen.
Platinum for immediate delivery fell 0.3 percent to $1,625 an ounce in London. One ounce of the metal bought as much as 0.9787 ounce of gold today, the most since April. The ratio has risen for nine days, the longest period of advances since April 2009.
Palladium lost 0.8 percent to $697.25 an ounce. Silver declined 0.6 percent to $30.68 an ounce.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
