BLBG:Gold Drops With Commodities On Europe Debt-Crisis Concern
Gold declined for a first day in three in London, dropping with other commodities on concern a bailout of Spanish banks will fail to contain the euro-region debt crisis.
Greek voters head to the polls on June 17 to decide whether to honor the country’s bailout and potentially determine the currency bloc’s future shape. The euro fell for a fourth session against the dollar today, helping fuel losses in oil and copper, before erasing the drop. Bullion and the greenback tend to move in opposite directions.
“The metal remains vulnerable to further pressure short- term, particularly if further weakness is seen in risk markets or Greece’s second election fails to yield an elected government, adding yet more euro-region concerns,” James Moore, an analyst at TheBullionDesk.com, said in a report.
Immediate-delivery gold lost 0.4 percent to $1,590.93 an ounce by 11:03 a.m. in London. August-delivery bullion declined 0.3 percent to $1,591.40 an ounce on the Comex in New York.
“Gold is biding time and consolidating near the $1,600-an- ounce level,” said Mark O’Byrne, executive director of Dublin- based brokerage GoldCore Ltd., which sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “While the technicals are poor, the fundamentals remain sound with the euro-zone debt crisis far from resolved.”
The metal swung between gains and losses yesterday after Spain requested as much as 100 billion euros ($125 billion) of European funds, becoming the fourth euro member to seek a bailout since the crisis began almost three years ago in Greece.
Gold’s drop below the June 8 low of $1,556.68 an ounce may trigger declines toward $1,526.97 and $1,522.65, Edel Tully, an analyst at UBS AG, said in a report today.
Bullion gained to $1,589.25 an ounce at the morning “fixing” in London, used by some mining companies to sell output, from $1,584 at the afternoon fixing yesterday.
Spot silver fell 0.2 percent to $28.5225 an ounce. Platinum lost 0.4 percent to $1,438.50 an ounce and palladium dropped 0.1 percent to $621.50 an ounce.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
