BLBG:Gold Declines as Rebound Hurts Physical Demand; Silver Tumbles
Gold dropped on signs that physical purchases may be slowing after prices climbed to the highest since April 15, when bullion completed the worst drop in three decades, and as investment holdings extended their decline.
Gold for immediate delivery lost as much as 0.7 percent to $1,459.60 an ounce, and was at $1,465.26 at 12:18 p.m. in Singapore. Prices rallied to $1,488.10 on May 3, rebounding from a two-year low of $1,321.95 on April 16.
Volumes for the benchmark cash contract on the Shanghai Gold Exchange sank to 15,995 kilograms yesterday, according to exchange data compiled by Bloomberg. That’s the least since April 12, when bullion entered a bear market. In India, imports may fall after the central bank restricted overseas purchases by banks. China and India are the two largest consumers. Holdings in exchange-traded products shrank for the 25th consecutive day.
“Retail consumers are very price-sensitive, so you don’t expect physical buying to go on and on, especially since we’ve come up more than $100 from the low,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s third-biggest listed brokerage. “Those who missed the first opportunity are probably hoping for another round of declines.”
Billionaire hedge-fund manager John Paulson lost 27 percent in his Gold Fund in April, according to a person familiar with the matter, who asked not to be identified as the information isn’t public. Armel Leslie, a spokesman for $18 billion New York-based Paulson & Co., declined to comment on the returns.
Gold for June delivery lost 0.3 percent to $1,464.40 an ounce on the Comex. Assets in bullion-backed ETPs fell to 2,254.684 metric tons yesterday, the least since October 2011, according to data compiled by Bloomberg.
Silver fell 1 percent to $23.7775 an ounce, platinum declined 0.7 percent to $1,495.10 an ounce, and palladium retreated 0.9 percent to $689.80 an ounce.
To contact the reporter for this story: Glenys Sim at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
