BLBG: Gold Heads for First Weekly Drop in Three on Dollar, Equities
Gold traded little changed as it headed for the first weekly decline in three as higher equities and a stronger dollar curbed demand for the metal.
Global equities reached the highest in more than a week amid efforts by central banks globally to support growth. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, was near a five-year high.
Gold fell to a two-week low on Dec. 17 after the Federal Reserve replaced a reference to borrowing costs staying low for a “considerable time” with a pledge to be patient on the timing for higher rates. Rising rates and a stronger dollar can cut gold’s allure because bullion generally offers investors returns only through price gains.
“Gold prices are currently capped by a stronger dollar and ongoing weak oil prices,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Equity-market gains further reduce the appeal of alternative assets like gold.”
Bullion for immediate delivery added 28 cents to $1,198.85 an ounce by 10:19 a.m. in London, according to Bloomberg generic pricing. It’s down 1.9 percent this week. Gold for February delivery rose 0.3 percent to $1,198.90 on the Comex in New York.
Futures trading volumes were 47 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
The number of Americans filing for unemployment benefits fell last week, data showed yesterday. Policy makers have projected the economy will reach full employment later next year, while inflation remains below their target.
Silver for immediate delivery rose 0.6 percent to $15.9767 an ounce, still set for a 6.2 percent decline this week, the most since September 2013. Platinum was little changed at $1,200.88 an ounce. Palladium lost 0.1 percent to $791.80 an ounce.
To contact the reporters on this story: Laura Clarke in London at lclarke24@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editors responsible for this story: John Deane at jdeane3@bloomberg.net Nicholas Larkin
