BLBG:Gold Swings as Prices Head for Weekly Drop on Recovery Outlook
Gold swung between gains and declines as it headed for a third weekly drop in London on speculation a strengthening U.S. economy will curb demand for a protection of wealth.
U.S. equities reached a record yesterday and global stocks climbed to the highest since June 2008 as data showed U.S. jobless claims fell more than estimated last week. Minutes of the Federal Reserve’s March meeting released April 10 showed several members were in favor of pulling back on its $85 billion monthly debt-buying program this year. Bullion is set for the biggest weekly decline since February.
“With better-than-expected U.S. employment figures, the prospect for extended ultra-accommodative monetary policy fades and therefore the support for gold,” Deutsche Bank AG analysts wrote today in a report. “With strength in the U.S. equity market there is less incentive for unconventional asset classes in our view.”
Gold for immediate delivery fell 0.2 percent to $1,557.66 an ounce by 9:17 a.m. in London. Prices swung between gains of 0.2 percent today and a loss of 0.3 percent and are down 1.5 percent this week. Bullion for June delivery was 0.5 percent lower at $1,557.10 on the Comex in New York. Futures trading volume was 27 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
Prices are down 7 percent this year on mounting optimism that the U.S. will help lead a global economic recovery. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, fell to 1,181.4 metric tons yesterday, the least since May 2010.
Silver for immediate delivery lost 0.4 percent to $27.5538 an ounce in London, narrowing its first weekly gain in five. Palladium fell 1.3 percent to $721.58 an ounce. Platinum was 0.6 percent lower at $1,523.47 an ounce. It’s down 0.9 percent this week, and a fifth weekly drop would be the worst run since August.
To contact the reporter 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
