BLBG:Gold Declines for Third Day Toward One-Month Low as Dollar Gains
Gold dropped for a third day to trade near a one-month low as a stronger dollar damped demand for commodities, overshadowing the highest ever holdings in exchange-traded products backed by bullion.
Spot gold slid as much as 0.4 percent to $1,687.15 an ounce, and was at $1,690.88 at 3:34 p.m. in Singapore. The metal fell to $1,684.93 yesterday, the least expensive since Nov. 6, as the dollar rallied on speculation that U.S. lawmakers will reach a budget agreement. Holdings in ETPs climbed to 2,627.59 metric tons yesterday, data compiled by Bloomberg show.
A few dozen Republicans joined a bipartisan call to break an impasse between President Barack Obama and House Speaker John Boehner to avoid spending cuts and tax increases in January, known as the fiscal cliff. The Dollar Index, which tracks the greenback against six major partners, halted its longest slump in more than a year yesterday and gained 0.2 percent today.
“Markets are being held hostage by progress on the fiscal cliff in the U.S.,” said Feng Liang, an analyst at GF Futures Co., a unit of the nation’s third-biggest listed brokerage. “There are still bargain hunters for gold below $1,700.”
Morgan Stanley reiterated its call for gold as the top commodity pick for 2013 on investor demand and central-bank buying, it said in a report today. That was in contrast with the view at Goldman Sachs Group Inc., which said in a report yesterday that bullion will probably peak in 2013 and keep declining the following year as U.S. growth accelerates.
Gold for February delivery lost 0.2 percent to $1,691.20 an ounce on the Comex in New York. The most-active contract slipped to $1,686 yesterday, also the lowest level since Nov. 6.
Cash silver fell for a third day, losing 0.6 percent to $32.675 an ounce. Spot platinum dropped 0.4 percent to $1,576.49 an ounce after touching a two-week low of $1,571.15 yesterday. Palladium decreased 0.3 percent to $682.70 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
