BLBG:Gold Falls to Lowest This Month as Asian Holiday May Curb Demand
Gold declined to the lowest price this month in London on speculation that physical demand will slow during this week’s Lunar New Year in Asia.
China, 2011’s second-biggest gold buyer, after India, and most Asian markets are closed for this week’s holiday. Gold is down 0.8 percent this year after rallying for a 12th straight year in 2012 as nations from the U.S. to China pledged more steps to boost economic growth. Haruhiko Kuroda, one of the potential candidates to head the Bank of Japan, said today in an interview in Tokyo that additional monetary easing can be justified this year.
“The absence of the Chinese market this week means demand from other regions has a larger gap to plug, thus exposing prices to a fragile floor,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. Still, “the broader macro environment remains supportive for prices given low interest rates and global balance sheet expansion.”
Gold for immediate delivery fell 0.4 percent to $1,661.11 an ounce by 11:08 a.m. in London. Prices reached $1,659.75, the lowest since Jan. 31. Futures for April delivery were 0.2 percent lower at $1,663.90 on the Comex in New York.
Bullion at the morning “fixing,” used by some mining companies to sell output, was at $1,663.50 in London, down from $1,668.25 in the afternoon of Feb. 8. The London-based World Gold Council is due to release a quarterly report this week that will show nations’ annual bullion demand.
European Ministers
Ministers from the 17-member euro area meet today to discuss aid to Cyprus and Greece as a tightening election contest in Italy and corruption allegations in Spain threaten to reignite the region’s debt crisis. Group of 20 finance chiefs and central bankers will gather in Moscow on Feb. 15.
“Given Asia is shut down for the New Year holiday, it allows markets internationally to focus on what’s happening in the EU,” said Gavin Wendt, a senior resource analyst and founder of Mine Life Pty in Sydney. The meeting of finance ministers will be “closely watched,” he said by phone today.
Silver for immediate delivery slipped 0.3 percent to $31.335 an ounce. Palladium fell 0.5 percent to $750.73 an ounce. Trading volume in New York was 61 percent lower than the average in the past 100 days for this time of day, according to figures compiled by Bloomberg. Platinum was down 0.2 percent at $1,712.40 an ounce.
Holdings in exchange-traded products backed by platinum reached a record 51.77 metric tons on Feb. 8, data compiled by Bloomberg show. Assets and prices have gained this year on concern that output may drop in top producer South Africa.
To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
