BLBG:Gold Heads for Biggest Monthly Drop Since May as ETPs Slide
Gold fell in London, set for the biggest monthly drop since May and the longest streak of declines since 1997, as improving economies curbed demand for bullion as a haven asset.
Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the precious metal, slid 12 metric tons yesterday to 1,258.4 tons, the lowest since August, according to figures on the fund’s website. Investors cut ETP holdings by more than 100 tons this month on concern a 12-year bull run is coming to an end, data compiled by Bloomberg show.
“Under more favorable conditions, investors holding gold ETPs do exit the metal in order to enter more risky investments and higher-yield-earning investments,” Bernard Dahdah, an analyst at Natixis SA, said by e-mail today.
Gold for immediate delivery retreated 0.5 percent to $1,589.90 an ounce by 10:11 a.m. in London. The metal is down 4.7 percent in February, poised for a fifth monthly decline. Bullion for delivery in April fell 0.3 percent to $1,590.40 an ounce on the Comex in New York.
Declines by the euro against the dollar also hurt gold, said Saeed Amen, an analyst at Nomura International Plc. Bullion and the greenback, which gained for a third session in four against the single European currency, tend to move inversely.
Japan’s industrial production rose for a second month, the Trade Ministry said today. Reports today may show the U.S. economy expanded at a revised 0.5 percent annualized pace in the fourth quarter and initial jobless claims fell for a third week in four, according to economists surveyed by Bloomberg.
Assets in bullion-backed ETPs, which slumped to a five- month low of 2,508.5 tons yesterday, are poised to drop 4 percent this month, the most since April 2008. In volume terms, global holdings are down 103.7 tons this month, more than five times January’s net sales.
Silver for immediate delivery fell 0.2 percent to $28.9456 an ounce in London. Platinum was little changed at $1,598.79 an ounce and palladium slid 0.6 percent to $740.23 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
