BS: Gold May Extend Biggest Decline in Two Weeks as Dollar Advances
July 19 (Bloomberg) -- Gold may drop, extending the biggest fall in almost two weeks, as the dollar gains, curbing demand for the metal as a store of value.
Bullion for immediate delivery declined as much as 0.2 percent to $1,191.05 an ounce before trading little changed at $1,192.65 at 1:44 p.m. in Singapore. The Dollar Index gained for the first day in five after U.S. equities fell on July 16 and U.K. home sellers cut prices for the first time this year. Gold declined 1.3 percent that day, closing at $1,193.
“Gold remains in a corrective mode even though sporadic physical buying from Asia may moderate the price fall,” said Wallace Ng, a Hong Kong-based executive director at ABN Amro Bank NV. “The longer-term bullish trend is still intact and gold prices will find support near $1,155.”
The Dollar Index, which tracks the U.S. currency against six counterparts, climbed as much as 0.4 percent today, gaining for the first time since July 12. The indicator, which typically moves inversely to gold prices, has gained 6.2 percent this year.
Rising Trend
Gold is on course for a 10th straight annual advance, the longest winning streak since at least 1920, as investors seek to protect their wealth from Europe’s financial turbulence, which weakened the euro and threatened the global economic recovery. Gold reached a record $1,265.30 an ounce last month.
Sixteen of 24 traders, investors and analysts surveyed by Bloomberg, or 67 percent, said bullion will climb this week. Three forecast lower prices and five were neutral. Gold will average $1,195 an ounce this year, Barclays Capital said on July 16 in a report, compared with a previous estimate of $1,166.
“Gold below $1,200 will be attractive to investors seeking to accumulate,” said Ong Yi Ling, an analyst at Phillip Futures Pte. “On a cautious note, should we see a sustained breach of $1,185, this may prompt another selloff.”
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,314.21 metric tons on July 16, according to figures on the company’s website.
Silver for immediate delivery and platinum were little changed at $17.8525 an ounce and $1,508 an ounce, respectively. Palladium climbed 1 percent to $454.33 an ounce.
--Editor: Jake Lloyd-Smith
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
