BLBG:Gold Retreats From Six-Week High as Stronger Dollar Cuts Demand
Gold fell from the highest level in almost six weeks in London as a stronger dollar curbed demand for the metal as an alternative investment.
The dollar gained for the first time in more than a week versus the euro before European finance ministers reconvene in Brussels to decide on aid for Greece and as a regional vote in Catalonia strengthened a drive for a referendum on secession in defiance of Spanish Prime Minister Mariano Rajoy. Gold reached $1,754.65 an ounce on Nov. 23, the highest since Oct. 15.
“The uncertainty surrounding the euro group meeting on Greece has impacted the euro-dollar and in turn gold,” Edel Tully, an analyst at UBS AG in London, wrote today in a report. “The risk is that given the recent subdued sentiment, failure to trade above $1,750 could quickly lead to yet another wave of disappointment. We overall expect some eagerness to buy dips in this cautiously optimistic atmosphere.”
Gold for immediate delivery fell 0.2 percent to $1,748.76 an ounce by 9:18 a.m. in London. Gold for December delivery was down 0.2 percent at $1,748.30 on the Comex in New York.
Holdings in gold-backed exchange-traded products rose 1 metric ton to a record 2,606.3 tons on Nov. 23, data compiled by Bloomberg show. The U.S. Mint sold 67,000 ounces of American Eagle gold coins so far this month, exceeding the 59,000 ounces for all of October, data on its website show.
Gold’s gain last week above $1,748.95, the 61.8 percent retracement of the October-to-November decline, “suggests there is potential for more upside in the near term,” according to UBS. There’s resistance at about $1,775 and the October high at $1,796.05, the bank said.
Silver for immediate delivery fell 0.3 percent to $33.9987 an ounce, after reaching $34.1575 on Nov. 23, the highest since Oct. 11. Platinum was 0.8 percent lower at $1,607.35, after climbing to a one-month high of $1,621.92 on Nov. 23. Palladium lost 0.2 percent to $664 an ounce. It reached $670 on Nov. 23, the highest since Oct. 5.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
