BLBG: Gold Falls in New York, London as Stronger Dollar Curbs Demand
June 8 (Bloomberg) -- Gold fell to the lowest in at least a week in New York and London as the dollar strengthened, reducing the metal’s appeal as an alternative investment. Other precious metals also retreated.
The U.S. Dollar Index, a six-currency gauge of the dollar’s value, gained as much as 1 percent today after jumping 1.7 percent on June 5, the most in more than four months. Gold, which typically moves inversely to the currency, slumped 2 percent in New York at the time, the most in two months.
“The dollar is still going to be the main driver” for gold, said Bernard Sin, head of currency and metals trading at Swiss refiner MKS Finance SA, by phone from Geneva. “Any bad news will trigger more selling.”
Gold futures for August delivery dropped $10.10, or 1.1 percent, to $952.50 an ounce on the New York Mercantile Exchange’s Comex division at 8:26 a.m. local time. Bullion for immediate delivery in London fell $3.40, or 0.4 percent, to $951.85 an ounce.
The metal declined to $946.50 in the morning “fixing” in London, used by some mining companies to sell production, from $962 at the afternoon fixing on June 5. Spot prices, which traded above $1,000 on Feb. 20, last week fell for the first week in five.
The dollar gained today as stocks fell around the world and investors raised bets the Federal Reserve will increase interest rates by the end of the year as the economy recovers. The dollar index climbed 1.8 percent last week as gold futures lost 1.8 percent in New York.
Lost Momentum
“Gold gains from here would be difficult unless risk aversion triggers buying in bullion once again,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a note. “With gold losing its momentum for a test of $1,000, investment in gold-backed exchange-traded funds also slowed.”
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 0.35 metric tons to 1,132.15 tons on June 5, the company’s Web site showed.
Silver for July delivery in New York fell 2.8 percent to $15.496 an ounce in New York. Platinum for July lost 3.8 percent to $1,238 an ounce, and palladium for September slipped 3.8 percent to $250 an ounce.
Platinum held in ETF Securities Ltd.’s exchange-traded commodities rose 4 percent to 310,008 ounces on June 5, from 298,147 ounces the day before, according to data on the company’s Web site. Silver assets fell 0.8 percent to 20.194 million ounces.
