BLBG: Gold Little Changed as Rising Equities Reduce Investment Demand
By Gavin Evans
July 17 (Bloomberg) -- Gold was little changed in Asia after U.S. equities extended gains for a fourth day, reducing demand for the metal as a safe investment during the global recession.
Bullion ended a five-day rally yesterday as U.S. equities reached a one-month high on rising company earnings and comments by economist Nouriel Roubini that the end of the nation’s recession is near. In many ways “the worst is behind us,” Roubini said in a speech in New York.
Gold’s “risk-aversion trade has completely run its course,” Justin Smirk, senior economist at Westpac Banking Corp., said by phone from Sydney. “From now, if you want to see gold do well, it’s basically going to be doing it off the back of other commodities.”
Bullion for immediate delivery dipped as much as 0.2 percent to $935.70 an ounce and traded at $937.31 at 1:31 p.m. in Singapore. It fell 0.2 percent to $937.34 yesterday, having gained 3.3 percent the previous five sessions.
Asian stocks rose today, rounding out the MSCI Asia Pacific Index’s best week since May. “Improved investor risk appetite is being reflected in rising stocks,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
Gold futures for August delivery rose $1.70, or 0.2 percent, to $937.10 in after-hours electronic trading on the New York Mercantile Exchange’s Comex unit. It fell 0.4 percent yesterday after touching a two-week high the day before.
Bullion is heading for its first weekly gain in three, boosted by a mid-week dip in the dollar and rising oil prices. Crude oil for August delivery fell 0.6 percent to $61.65 a barrel today, having gained 4.2 percent the past two days. The Dollar Index, a six-currency gauge of the dollar’s value, rose for the first time in three days.
‘Big Run’
Gold’s “had a really big run relative to other commodities this year,” Westpac’s Smirk said. “If you want to see gold really get a ‘wiggle’ on, you’re going to have to see a huge run on oil, copper and the major commodities, and really be showing there’s a huge, massive demand-pull and potential inflationary risk out there.”
Among other precious metals for immediate delivery, silver fell 0.2 percent to $13.285 an ounce and platinum jumped 0.6 percent to $1,171.50 an ounce at 1:34 p.m. Singapore time. Palladium dropped 0.3 percent to $247.50 an ounce.
Silver is poised for the first weekly gain in seven, with the price rising 4.7 percent, and platinum is headed for the first weekly advance in six, with the metal gaining 5.5 percent.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
