GOLD declined the most in a month as physical demand ebbed and a stronger dollar trimmed demand for the precious metal as an alternative investment. Global bullion holdings in exchange-traded products tumbled 6.9pc last quarter, the most since at least 2004. The dollar rose for the first time in four sessions against a basket of six currencies. Cypriot government officials were seeking easier bailout terms in talks with the European Union and the International Monetary Fund yesterday. Gold is in a "bubble" and will head into a so-called bear market as improving US economic growth prompts the Federal Reserve to curb stimulus efforts, Societe Generale analysts including London-based Robin Bhar said in a report yesterday. The US Mint's sales of American Eagle gold coins slumped 23pc in March from a month earlier to 62,000 ounces. "Lower physical demand and dollar strength are working against gold," Bill O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in an interview. "The safe-haven premium is not high as Europe is not falling apart even though slowdown concerns remain." In New York, gold futures for June delivery fell 1.1pc to $1,583.80 an ounce on the Comex market, heading for the biggest drop since February 28. Through yesterday, prices fell 4.5pc this year, after 12 straight annual gains, as a rally in equities and stronger economic growth cut demand for the precious metal as a haven. "There's not much physical interest anywhere," Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) in Geneva, said yesterday in a telephone interview. Silver futures for May delivery retreated 1.4pc to $27.55 an ounce in New York, after reaching $27.425, the lowest since August 3. It closed at $27.944 yesterday, a 20pc drop from an October 4 high, meeting the common definition of a bear market. (Bloomberg)

Source