BLBG:Gold Declines as Dollar Strengthens Before Data, Fed Statement
Gold dropped on concerns that the European debt crisis may spread and growth in China will slow even as the U.S. economy improves, boosting the dollar and eroding demand for assets priced in the U.S. currency.
Spot gold fell as much as 0.6 percent to $1,633.60 an ounce and was at $1,634.75 at 3:28 p.m. in Singapore. Bullion ended April 20 unchanged at $1,642.93 as German business confidence exceeded expectations, strengthening the euro versus the dollar.
June-delivery bullion declined 0.5 percent to $1,635 an ounce on the Comex in New York. Open interest in Comex gold futures dropped to 398,526 contracts on April 17, the lowest since September 2009, according to U.S. Commodity Futures Trading Commission data.
“There just hasn’t been much interest in gold these days, and direction comes from all over including the dollar and stock markets,” Huang Mingchen, a trader at Wonder Futures Co., said from Hangzhou. “We’ll probably get another week of muted trading as markets digest the IMF meeting over the weekend, and before the Fed policy statement.”
More than $430 billion in fresh funds were pledged to the International Monetary Fund to help stem Europe’s sovereign debt crisis after policy makers met last week in Washington. Dutch Prime Minister Mark Rutte will meet with his cabinet today to discuss how to pass a budget that meets European Union targets before calling early elections after one of the parties in his minority coalition withdrew.
China Output
China’s manufacturing may contract for a sixth month in April, according to an index released by HSBC Holdings Plc and Markit Economics today, adding to signs that the world’s second- biggest economy may face a deeper slowdown. That sent stocks and commodities including oil and copper lower today.
The dollar rose against a six-currency basket including the euro before the U.S. consumer confidence and new home sales reports tomorrow that economists say may show the world’s largest economy is gaining momentum. The Federal Reserve will release a statement on monetary policy along with its projections for growth, unemployment and inflation on April 25.
Spot palladium, this year’s worst-performing precious metal, fell 0.9 percent to $669.75 an ounce, after reaching $678.84 on April 20, the most expensive in a month. Cash silver dropped 1 percent to $31.3975 an ounce and platinum declined 0.4 percent to $1,574 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
