MW: Gold weaker as equity rally kills haven appeal
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — Gold futures slipped Wednesday, undercut as global equities and investor appetite for risk remained on the rise, undercutting the yellow metal’s safe-haven appeal.
Gold for April delivery GCJ3 +0.14% fell $2, or 0.1%, to $1,671.50 an ounce in electronic trade. Gold lost $2.90 an ounce on Tuesday.
Investors “remain unconvinced gold is capable of replicating its decade-long robust performance through to 2012 given recent improvement to global risk sentiment and rallying equity markets,” said Andrey Kryuchenkov, strategist at VTB Capital in London.
Japanese stocks soared to four-year highs Wednesday as the yen continued its decline versus major rivals. See: Japan stocks soar to four-year highs .
European equities were also on the rise, with the Stoxx 600 Europe index XX:SXXP -0.58% gaining 0.3%. U.S. stock-index futures posted modest gains. U.S. equities hit five-year highs last week.
“For now, we expect gold to continue consolidating in the current short-term range” ahead of the European Central Bank and Bank of England monetary-policy statements on Thursday, Kryuchenkov said.
Neither bank is expected to change monetary policy, though ECB President Mario Draghi will be closely listened to at his monthly news conference for any reaction to the sharp fall in the Japanese yen, which has prompted complaints from some European leaders.
Draghi last month showed little sign of concern over the yen’s fall.
Silver futures were also under pressure, with the March contract SIH3 -0.33% down 18 cents, or 0.6%, at $31.70 an ounce.
April platinum PLJ3 +0.26% jumped $25 an ounce, or 1.5%, to $1,732.20, while March palladium gained $2.55, or 0.3%, to $768.
High-grade-copper futures for March delivery HGH3 -0.81% slipped 2 cents to $3.75 a pound.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
