BLBG:Gold Extends Weekly Drop as Stronger Dollar Curbs Demand
Gold declined in London, extending a weekly drop, as a stronger dollar curbed demand for the metal as an alternative investment. Palladium headed for a weekly gain.
The dollar reached a two-week high versus six major currencies today after data showed yesterday claims for U.S. jobless benefits unexpectedly dropped to the lowest level in more than five years. Assets in exchange-traded products gained 2.5 metric tons to 2,241.7 tons yesterday, the first increase since April 1, according to data tracked by Bloomberg. Global ETP assets have still declined 15 percent this year as gold tumbled into a bear market last month.
“Gold’s been put a little bit under pressure because of the dollar move,” Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “Physical-related demand had been very strong up to yesterday. The lower gold goes, the more physical demand will come in.”
Gold for immediate delivery fell 0.7 percent to $1,448.41 an ounce by 10:05 a.m. in London. It’s down 1.5 percent this week. Bullion for June delivery was 1.4 percent lower at $1,447.60 on the Comex in New York. Futures trading volume was 16 percent above the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
Physical Demand
Rising coin sales and demand for physical gold in Asia drove prices up 9.6 percent since reaching a two-year low of $1,321.95 set April 16. Holdings in the SPDR Gold Trust, the biggest gold-backed ETP, expanded for the first time since March 19, data on its website showed.
“Gold’s had a good run after prices collapsed and is consolidating in this $1,400-$1,480 region,” said Yang Shandan, a senior trader at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “The market needs both retail and investment demand to come in strongly for prices to move back above $1,500.”
Silver for immediate delivery was 0.3 percent lower at $23.657 an ounce in London, taking its weekly decline to 1.9 percent. Palladium fell 0.9 percent to $702.68 an ounce for a 1.3 percent weekly gain. Platinum was 0.4 percent lower at $1,501.60 an ounce, little changed this week.
South Africa’s Association of Mineworkers and Construction Union that’s locked in a battle for dominance at local mines plans to hold separate wage talks on May 13 and 14 with Lonmin Plc and Impala Platinum Holdings Ltd. instead of mediating with the Chamber of Mines industry body, according to Treasurer Jimmy Gama.
Palladium’s shortage rose to the biggest in 11 years in 2012 as strike action in South African mines curbed supply and demand expanded, Thomson Reuters GFMS said on May 2. Platinum slipped into a deficit for the first time since 2004. Bloomberg competes with Thomson Reuters in selling financial and legal information and trading systems.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
