BS: Gold Falls as Dollar Gain Curbs Demand for Alternative Asset
By Pham-Duy Nguyen
June 23 (Bloomberg) -- Gold futures fell to a one-week low as the dollar’s rally eroded demand for the precious metal as an alternative asset.
The greenback gained for the fourth straight session against a basket of six major currencies. Before today, gold rose 13 percent this year, reaching a record $1,266.50 an ounce on June 21, on demand for a haven amid Europe’s sovereign-debt woes.
“Now that the euro has stabilized, the focus is back on the dollar-and-gold relationship,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “There’s just not enough fear and panic to send gold flying. There’s a little disappointment among recent longs that gold is just backing and filling, instead of advancing after making an all-time high.”
Gold futures for delivery in August dropped $11.60, or 0.9 percent, to $1,229.20 at 10:51 a.m. on the Comex in New York. Earlier, the metal touched $1,225.20, the lowest level for a most-active contract since June 15.
Gold has historically moved inversely to the dollar. This year, the metal climbed to records in euros, the U.K. pound and Swiss franc.
Before today, the euro climbed 3.3 percent from a four-year low on June 7.
“It is becoming apparent that at least some of the aggressiveness among speculators as regards to pouncing upon the euro and piling further into bullion is on the decline,” said Jon Nadler, a senior analyst at Kitco Inc. in Montreal.
Silver futures for July delivery dropped 48.2 cents, or 2.5 percent, to $18.465 an ounce, heading for the biggest drop in two weeks.
Platinum futures for October delivery fell $34.10, or 2.1 percent, to $1,568 an ounce on the New York Mercantile Exchange, poised for the largest decline in four weeks.
Palladium futures for September delivery tumbled $16.95, or 3.5 percent, to $473 an ounce.
--Editors: Patrick McKiernan, Michael Arndt
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
