BLBG: Gold May Rise in London on Falling Equities, Economic Concern
Gold, little changed in London, may rise as declining equities and concern about the economic outlook prompt investors to seek a haven.
The MSCI World Index of shares slid as much as 0.6 percent, retreating for a second day and reducing its climb since March 9 to 24 percent. U.S. stock-index futures fluctuated after Intel Corp. said it faces a “fragile” economy and gave no detailed sales or profit forecasts for a second straight quarter.
“After some of the gains recently in equities, people may have taken a step back,” Michael Widmer, an analyst at BNP Paribas SA in London, said by telephone. “That may have removed some support from assets that are perceived riskier and may support gold a little bit.”
Bullion for immediate delivery fell $2.63, or 0.3 percent, to $888.09 an ounce at 2 p.m. local time, erasing a gain of as much as 1.4 percent. June gold futures dropped 0.2 percent to $890 an ounce on the New York Mercantile Exchange’s Comex division. Gold rose this week as high as $899.95 an ounce, the highest since April 3.
The metal gained to $892.25 in the morning “fixing” in London, used by some mining companies to sell production, from $887.50 at yesterday’s afternoon fixing.
Stocks rebounded in recent weeks on optimism that the worst of the world economic slump may be over, gaining even as some companies posted disappointing earnings. About 27 percent of companies in the Standard & Poor’s 500 Index have reported negative earnings surprises for the first quarter so far.
Gannett, JPMorgan
“This week we expect gold to receive support from negative corporate earnings and disappointing macro releases, although a firmer dollar could temper gains,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote in a report.
Motorcycle manufacturer Harley-Davidson Inc., newspaper publisher Gannett Co. and lender JPMorgan Chase & Co. are among companies scheduled to report results this week. U.S. economic reports from consumer prices to housing starts are due.
The Dollar Index, which tracks the currency against six other monies, rose as much as 0.8 percent. Gold and the dollar tend to move inversely.
Silver for immediate delivery was unchanged at $12.77 an ounce. Fresnillo Plc, the world’s largest producer of the metal, said first-quarter output rose 9.1 percent and this year’s total will increase compared with 2008. Silver output was 34.8 million ounces last year.
Platinum rose $8.50, or 0.7 percent, to $1,218 an ounce. The metal climbed to a six-month high of $1,252 an ounce on April 13 and has risen 31 percent this year. Last week it gained 4.6 percent, the most in four weeks, helped by news that Chinese passenger-car sales rose to a record in March.
