BLBG: Gold May Decline After Posting Best Quarterly Advance Since End of 2007
Gold may decline after completing the best quarterly advance since the final three months of 2007 amid speculation investors don’t believe further gains are imminent.
Immediate-delivery bullion swung between a loss of 0.3 percent and a gain of 0.1 percent before trading at $1,239.93 an ounce at 11:18 p.m. in Singapore. The metal jumped 12 percent in the last quarter, touching a record $1,265.30 on June 21 as investors sought to protect their wealth.
“There’s no conviction in gold in the near term,” said Yingxi Yu, a Singapore-based analyst at Barclays Capital. “The fear factor is still there but gold will probably be in a relatively tight range.”
Bullion is headed for a 10th annual advance as the financial crisis in Europe erodes the value of the euro, slows regional economic growth and hurts equities. Moody’s Investors Service said yesterday it placed Spain’s Aaa local and foreign- currency bond ratings on review for possible downgrades.
Assets in the SPDR Gold Trust, the world’s biggest exchange-traded fund backed by bullion, rose to a record 1,320.44 metric tons this week.
“For the time being, gold looks likely to remain in demand as a safe haven,” Eugen Weinberg, head of commodity research at Commerzbank AG, wrote in a report yesterday. European banks today need to repay 442 billion euros ($540 billion) that they borrowed from the European Central Bank last year, which “could cause some nervousness,” Weinberg wrote.
India Demand
Still, that trend may be countered by weak seasonal demand for gold from India, the largest importer, Weinberg said.
Purchases by India may tumble as much as 36 percent this year as higher prices and volatility slow demand, the Indian Bullion Market Association said. Imports may be about 350 tons to 400 metric tons in the year ending March 31, 2011, compared with about 550 tons a year earlier, the association’s President Anjani Sinha said yesterday in an interview in Mumbai. Imports are down by about half in the last three to four months, he said.
Among other precious metals for immediate delivery, silver shed 0.5 percent to $18.515 an ounce and palladium was little changed at $441.63 an ounce, while platinum lost 1.8 percent to $1,506.05 an ounce.
