BLBG:Gold Falls After Three-Day Gain as Stronger Dollar Curbs Demand
Gold fell, ending a three-day advance in London, as a strengthening dollar curbed demand for an alternative investment.
Gold jumped yesterday after Cypriot President Nicos Anastasiades bowed to demands to raise 5.8 billion euros ($7.5 billion) through a proposed tax on bank deposits. The nation’s lawmakers will meet today to debate how to spread the levy. The dollar rose for a second day versus the euro and yesterday reached the highest since December. The Federal Reserve begins a two-day policy meeting today.
“The U.S. dollar is firming, which is a bit negative for precious metals,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “We’re seeing some profit taking. There’s still good reasons to hold gold.”
Gold for immediate delivery fell 0.2 percent to $1,602.61 an ounce by 9:30 a.m. in London. Prices reached $1,611.33 yesterday, the highest since Feb. 27. Futures for April delivery were down 0.2 percent at $1,601.40 on the Comex in New York. Futures trading volume was 38 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
The proposed bank-deposit levy, announced March 16, sparked concern among investors about setting a precedent by breaking the taboo against raiding bank accounts. The parliament probably won’t pass the levy, Reuters reported, citing government spokesman Christos Stylianides. Banks and stock markets in Cyprus are closed today and tomorrow.
Gold’s Drop
Gold is down 4.3 percent this year amid signs the U.S. economy is improving and as Fed policy makers remain divided on the pace of stimulus that helped prices rally for a 12th straight year last year. Holdings in the SPDR Gold Trust, the biggest bullion ETP, fell to 1,219.5 metric tons yesterday, the lowest since July 2011, data on its website show.
Silver for immediate delivery lost 0.2 percent to $28.845 an ounce in London. Palladium was down 1 percent at $756.05 an ounce. Platinum slipped 0.2 percent to $1,576.10 an ounce and a seventh successive daily drop would be the worst run since May. One ounce of platinum bought as little as 0.9817 ounce of gold today, near yesterday’s level that was the lowest since Jan. 14, data compiled by Bloomberg show.
Platinum and silver ETP holdings are at records, data compiled by Bloomberg show.
To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
