BLBG:Gold Declines to Lowest in More Than a Month as ETP Assets Drop
Gold weakened to the lowest in more than a month as investor holdings slid the most in two weeks and a top U.S. treasury official said Group of 20 nations must avoid currency devaluations. Silver retreated.
Gold for immediate delivery lost as much as 0.3 percent to $1,642.90 an ounce, the cheapest since Jan. 4, and traded at $1,646.81 at 1:06 p.m. in Singapore. Spot silver fell as much as 0.7 percent to $30.735 an ounce, the lowest since Jan. 28.
The G-20 needs to refrain from competitive devaluations and promote transparency in exchange rates, said Lael Brainard, the U.S. Treasury’s undersecretary for international affairs. Global growth was “weak and vulnerable to the downside,” she said yesterday. Gold gained for a 12th year in 2012 as investors sought a hedge against currency debasement. The Dollar Index was at the highest level since Jan. 10 today.
“There’s more confidence in the dollar compared to other trading currencies,” said David Lennox, an analyst at Fat Prophets in Sydney. “There’s more confidence in what we’re seeing coming out of the U.S., particularly the private sector, in terms of growth.” A decline in holdings of exchange-traded products may also pressure prices, he said.
ETP assets backed by gold fell 0.14 percent to 2,611.41 metric tons yesterday, the biggest decline since Jan. 24, according to data compiled by Bloomberg. Gold for April delivery was little changed at $1,647 an ounce on the Comex in New York.
Nuclear Test
Price declines may be capped as North Korea conducted its third nuclear test today, boosting demand for bullion as a safe haven, Lennox said. North Korea detonated a “small, light” atomic bomb with high explosive capability, the official Korean Central News Agency reported today.
Futures fell 0.2 percent to 30,570 rupees per 10 grams ($1,764.48 an ounce) on the Multi Commodity Exchange of India Ltd. Markets in Hong Kong, China, Singapore, Malaysia and Taiwan are closed for Lunar New Year holidays today.
Bullion declined 1.7 percent this year as silver advanced 1.8 percent and platinum climbed 10 percent. One ounce of gold bought as many as 53.4695 ounces of silver today, the most since Jan. 29, data compiled by Bloomberg show.
Spot platinum gained 0.5 percent to $1,697.50 an ounce after ETP holdings declined from a record. Spot palladium lost 0.2 percent to $757.25 an ounce, and silver fell 0.3 percent to $30.8650.
To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
