MW: Gold falls as rising stocks reduce safety buying
Gold futures fell slightly Wednesday, moving lower for a third session as rising equity markets reduced safe-haven buying.
Gold for February delivery, the front-month contract, which is expiring today, fell $3.10, or 0.3%, to $966 an ounce in North American electronic trading. The more active April contract lost 0.6% to $963.70.
Gold has been fallen since Friday, when it ended above $1,000 for the first time in 11 months. Prices are now about $40, or nearly 0.4%, lower than Friday's high. Some analysts pointed to profit-taking for the recent drop.
"Profit-taking was evident across the precious complex as equity sentiment bounced," said James Moore, a metals analyst at TheBullionDesk.com.
He expects the current dip to be short-lived, "given the deep problems facing the world's economies and the vulnerability of the banking sector." Safe-haven seekers will also emerge as bargain hunters, he added.
Gold holdings in SPDR Gold Shares , the largest gold exchange-traded fund, stood at a record level of 1,028.98 tons Tuesday, unchanged for a fourth session, according to latest data from the fund.
Stocks in Asia and Europe rallied following Tuesday's gains in U.S. equities after Federal Reserve Chairman Ben Bernanke told Congress that nationalization of major U.S. banks isn't needed to ensure their viability.
"I don't see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when that just isn't necessary," Bernanke said. See The Fed.
Meanwhile, President Barack Obama struck an optimistic tone in his speech Tuesday night before a joint session of Congress, saying that the U.S. will emerge from the recession "stronger than before."
In a lengthy speech, Obama rolled out more of his economic agenda, promising job creation, a doubling of renewable-energy production, health-care reform and a bolstering of education. See full story.
The U.S. will release existing-home-sales data later in the morning. Economists expect a drop of 0.4% in January home sales, following a gain of 6.5% in the previous month.
In other metals trading Tuesday, March copper gained 2.2% to $1.5195 a pound, while March silver lost 0.9% to $13.875 an ounce.
March palladium fell 1% to $199.40 an ounce, and the April contract for sister metal platinum dropped 0.9% to $1,039.60 an ounce.
