Gold fell for a second day, paring the best weekly advance since January 2009, as a rebound in equities and higher margins on futures encouraged sales after the metal’s rally to its highest ever above $1,800 an ounce. Bullion for immediate delivery shed as much as 0.9 percent to $1,748.25 and traded at $1,763.15 at 12:33 p.m. in Singapore. Gold is still 6 percent higher this week after reaching a record $1,814.95 yesterday on concern that European and U.S. debt problems may worsen. The new margin requirements “should push out speculators a bit,” Frank Holmes, chief investment officer at U.S. Global Investors Inc., said in an e-mail. “We could easily see a correction between 10 to 15 percent, but ultimately we think gold prices will continue to rise.” CME Group Inc. (CME), the world’s largest futures market, boosted gold contract margins, or the minimum amount of cash that speculators and hedgers must keep on deposit, by 22 percent from the close of business yesterday. Both the initial- and maintenance-margin requirements were raised. The December-delivery contract was up 0.7 percent at $1,764 an ounce, after rising as much as 1.1 percent earlier on the Comex in New York. Futures touched an all-time high of $1,817.60 yesterday and have jumped 6.3 percent this week. “This will cause a brief pullback,” Mitchell Krebs, chief executive officer of Coeur d’Alene Mines Corp., said in a Bloomberg Television interview. “I see us continuing to march ahead to the $2,000-and-above mark with everything going on in Europe, the U.S.” Coeur d’Alene, based in the city of the same name in Idaho, produces gold and silver. Equities Rebound Gold has surged since Aug 5., when Standard & Poor’s cut the U.S. credit rating by one level from the top AAA grade. That, coupled with speculation that Europe’s sovereign-debt crisis is worsening, triggered a slump in global equities. Regulators in France, Spain, Italy and Belgium will ban short-selling from today to stabilize markets. Short sales are bets on price falls. Stocks rebounded as an unexpected drop in U.S. jobless claims eased concern the world’s largest economy may slip into recession. A report showed first-time applications for jobless benefits fell to a four-month low of 395,000, compared with 405,000 that economists in a Bloomberg survey were expecting. Platinum traded back above gold as the easing of economic concerns boosted the demand outlook for the metal used mainly in autocatalysts. It fell below gold on Aug. 8 for the first time since the collapse of Lehman Brothers Holdings Inc. in 2008 that pushed the world into its worst recession since World War II. Cash platinum last traded little changed at $1,799.13 an ounce after rising 0.6 percent. Spot silver was little changed at $38.705 an ounce, while palladium rose 0.6 percent to $747.38 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source