BLBG:Gold May Decline as Advance to Six-Week High Prompts Selling by Investors
Gold may decline for the first time in three days in London as a rally to a six-week high spurs some investors to sell the metal amid lower demand from Asia.
Bullion reached $1,681.50 an ounce yesterday, the most since Dec. 12, amid concern about Europe’s debt crisis and as the European Union agreed a ban on imports of oil from Iran as part of measures to increase the pressure on its nuclear program. Financial markets in Asian countries including China and South Korea were shut today for the Lunar New Year holiday.
Gold “may be vulnerable to profit-taking, with physical buying reduced due to Chinese holidays,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report.
Bullion for immediate delivery fell $2.80, or 0.2 percent, to $1,674.38 an ounce by 9:09 a.m. in London. Gold for February delivery was down 0.2 percent at $1,674.40 on the Comex in New York.
The metal climbed 10 percent in 2011, an 11th consecutive annual gain, as investors sought to diversify from equities and some currencies. While gold slid 13 percent since touching a record $1,921.15 in September, holdings in bullion-backed exchange-traded products are within 1.6 percent of last month’s all-time high. Assets were 2,355.3 metric tons on Jan. 20, data compiled by Bloomberg show.
Europe’s finance ministers balked at putting up more public money for Greece, calling on bondholders to provide greater debt relief in order to point the way out of the two-year-old debt crisis. Brinkmanship over Greece clouded progress toward new fiscal rules and a beefed-up rescue fund, denting newfound confidence in the anti-crisis strategy and threatening to overshadow next week’s summit of European leaders.
China Holiday
“We’re not getting much support from physical demand this week with the Chinese out,” said Alexandra Knight, an economist at National Australia Bank Ltd. “Any weakness in the dollar will be helpful to gold but it should be driven by the broader market sentiment for the rest of the week.”
Silver for immediate delivery was little changed at $32.3369 an ounce after reaching $32.785 yesterday, the most since Dec. 8. It’s the best-performing precious metal this year with a gain of 16 percent.
Palladium was down 0.9 percent at $681.50 an ounce after rising to a four-month high of $689.50. Platinum declined 0.5 percent to $1,554.25 an ounce. It earlier today climbed to $1,568.50, the highest price since Dec. 2.
To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
