BLBG:Gold Declines for Third Day on Drop in SPDR, Dollar’s Strength
Gold fell for a third day in the longest slump since April, when the metal entered a bear market, as investment holdings resumed a drop and the dollar strengthened.
Gold for immediate delivery lost as much as 1.5 percent to $1,426.16 an ounce, and was at $1,435.72 by 2:24 p.m. in Singapore. Prices dropped 1.5 percent last week, the first retreat in three weeks, as the Dollar Index rallied 1.2 percent and the Standard & Poor’s 500 Index soared to a record.
Holdings in the SPDR Gold Trust fell to 1,051.65 metric tons on May 10, after expanding the day before for the first time since March 19, according to data compiled by Bloomberg. Assets in the biggest gold-backed exchange-traded product have shrunk 22 percent this year. Gold is 14 percent lower in 2013 as some investors lost faith in the metal as a store of value and switched to riskier assets.
“Commodities in general have been hurt by the dollar’s recent strength,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state-owned investment companies. “The latest CFTC and ETF data continue to suggest investors are losing interest in gold.”
Gold for June delivery fell 0.2 percent to $1,434.20 an ounce on the Comex in New York. Speculators increased bets on lower prices in the week to May 7, holding 67,374 so-called short contracts, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options.
U.S. Recovery
The dollar has gained 4.3 percent against a six-currency basket including the yen and the euro this year as data showed the U.S. economy strengthening, while policy makers in Japan boosted stimulus and the European Central Bank cut interest rates to a record. The yen fell past 102 per dollar for the first time in more than four years today after Group of Seven finance chiefs indicated they’ll tolerate the slide for now.
Silver declined 0.8 percent to $23.6935 an ounce, platinum decreased 0.3 percent to $1,489.70 an ounce, and palladium retreated 0.4 percent to $705.05 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
