BLBG: Gold Declines in London Trade on Stronger Dollar, Earlier Gain
Gold fell for a second day in London as a stronger dollar reduced the metal’s appeal as an alternative investment and as some traders sold the commodity after a recent rally. Platinum also declined.
The dollar gained as much as 0.5 percent against the euro today. The metal, which typically moves in the opposite direction to the U.S. currency, reached a three-month high of $929.70 an ounce Jan. 30 and is up 2.5 percent this year.
“The stronger dollar tone has caused gold to drift lower this morning,” James Moore, an analyst at TheBullionDesk.com in London, wrote today in a note.
Bullion for immediate delivery lost as much as $10.38, or 1.1 percent, to $901.13 an ounce and traded at $904.53 by 9:02 a.m. in London. April futures fell $9.30, or 1 percent, to $905 in electronic trading on the Comex division of the New York Mercantile Exchange.
Gold may rise this week on speculation that government spending to revive the U.S. economy will spark inflation, according to investors and analysts surveyed from Tokyo to Chicago on Feb. 5 and Feb. 6. Twenty of 27 respondents advised buying the metal. Five said to sell and two were neutral.
Bullion assets in exchange-traded funds managed by ETF Securities Ltd. rose to a record 2.28 million ounces on Feb. 6, the company said.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Feb. 3, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 155,306 contracts on the Comex division of the New York Mercantile Exchange.
Long Liquidation
“Given the jump in non-commercial longs last week the metal will be vulnerable to further pockets of long liquidation,” TheBullionDesk.com’s Moore said.
Among other metals for immediate delivery in London, silver fell 1 percent to $12.99 an ounce. Platinum slipped $12.75, or 1.3 percent, to $989.25 an ounce, and palladium was 0.8 percent lower at $210.75 an ounce.
Nissan Motor Co., Japan’s third-largest automaker, reduced its full-year net income forecast to a loss today, and plans to cut 20,000 jobs in the next fiscal year. Toyota Motor Corp., the world’s largest automaker, last week said its loss will be three times earlier estimates. Automakers account for about half of global platinum and palladium consumption.
