Gold declined in New York on speculation that investor demand for the precious metal will be curbed by signs that the global economic recovery is strengthening and gains in the dollar. The dollar gained as much as 0.7 percent against the euro. Global equities last week gained the most since July 2009, while holdings in the world’s biggest gold-backed exchange-traded fund fell for a second day on July 9. China’s exports climbed last month, a July 10 report showed. “Given the increase in broader risk appetite, gold may be vulnerable to further long liquidation,” said James Moore, an analyst at TheBullionDesk.com in London. Still, “we expect further dip-buying interest below $1,200 an ounce from physical and investment players.” Gold for August delivery dropped $4.40, or 0.4 percent, to $1,205.40 an ounce at 7:52 a.m. on the Comex in New York. The metal for immediate delivery declined 0.5 percent to $1,205.40 an ounce. “To some extent gold prices are trading lower due to a stronger dollar,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. Gold typically moves inversely to the greenback. Gold in the morning “fixing,” used by some mining companies to sell production, fell to $1,203.75 an ounce from $1,208.75 an ounce at the afternoon fixing on July 9. Gold is up 10 percent this year and is set for a 10th straight annual increase, the longest run of gains since at least 1920. The metal reached a record $1,266.50 on June 21 as investors sought to protect their wealth against the crisis in Greece and other European nations struggling to repay debt, and on concern that the global recovery may slow. ‘Losing Their Appetite’ Bets on higher gold prices by hedge-fund managers and other large speculators dropped. Speculative long positions outnumbered short positions by 209,042 contracts on the Comex in New York in the week ended July 6, U.S. Commodity Futures Trading Commission data showed. Net-long positions fell by 35,683 contracts, or 15 percent, from a week earlier. China’s exports surged 43.9 percent from a year earlier in June to $137.4 billion and the trade surplus more than doubled to $20 billion, the most in eight months, according to data released July 10. Central banks in South Korea, Malaysia, Taiwan and India raised interest rates in the past weeks. “Gold may need some impetus to break beyond the current level,” said Chae Un Soo, a Seoul-based trader with KEB Futures Co. “As concerns about the economic recovery ease, investors are losing their appetite for gold, though any sharp decline in prices is unlikely.” SPDR Assets Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, fell 1.52 metric tons to 1,314.51 tons on July 9, according to the company’s website. Global holdings of the metal by ETFs were little changed at 2,072.42 tons on July 9, according to Bloomberg data from 10 providers. Silver for September delivery fell 0.2 percent to $18.045 an ounce. Platinum for October delivery declined 0.3 percent to $1,529.20 an ounce and palladium for September delivery was down 0.1 percent at $456.30 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.

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