BLBG: Gold Declines With Silver for Second Day as Dollar Strengthens
Gold and silver fell for a second day as the dollar strengthened for the first time this week and investors speculated that cheap oil prices will keep inflation in check.
Data from the European Central Bank showed its second round of long-term loans came in at the low end of analysts’ estimates, bolstering the case for the institution to start large-scale quantitative easing. U.S. economic reports may show retail sales increased in November. Oil traded near a five-year low as Saudi Arabia questioned the need to cut output.
“Gold has to contend with lower oil prices, but the key risk remains the resumption of a dollar rally as investors wait for the Fed’s next move,” said Xia Yingying, a Hangzhou, China-based analyst at Nanhua Futures Co.
Bullion for immediate delivery fell 0.3 percent to $1,222.71 an ounce by 11:10 a.m. in London. The metal for February delivery on the Comex slipped 0.5 percent to $1,223.10.
Holdings in gold exchange-traded funds have risen for the past two days, rebounding from a five-year low. Assets increased 0.2 percent yesterday, or 2.7 metric tons, to 1,612 tons, according to data compiled by Bloomberg.
Trading volume for bullion futures was 11 percent above the 100-day average for this time of day.
Fed officials will meet next week to debate the timing of the first interest-rate increase since 2006. The Bloomberg Dollar Spot Index rose 0.2 percent.
The ECB said it allotted 130 billion euros ($161 billion) to euro-area banks at a fixed interest rate of 0.15 percent in its targeted longer-term refinancing operation. The median estimates from a Bloomberg News was 148 billion euros. The less banks borrow, the more policy makers must find other ways to boost the balance sheet.
Silver for immediate delivery fell 0.4 percent to $16.9992 an ounce. Palladium gained 0.3 percent to $816.75, while platinum was little changed.
To contact the reporter on this story: Laura Clarke in London at lclarke24@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net John Deane
