BLBG: Gold Declines With Silver as Dollar’s Strength Curbs Demand
Gold fell on concern gains last week were exaggerated amid prospects for a stronger dollar and declining investor demand.
The metal rose 1.9 percent on Dec. 26, the biggest gain in more than two weeks, on speculation that China will take more measures to bolster the economy. Holdings in SPDR Gold Trust, the largest exchange-traded product backed by the metal, have dropped to a six-year low and the Bloomberg Dollar Spot Index is near the highest level in five years.
“The slight move lower today has been a counter reaction to the rally on Friday,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “The dollar is still expected to move higher into January, and that will continue to limit the upside potentials at this stage.”
Gold for February delivery retreated 0.3 percent to $1,191.90 an ounce at 7:14 a.m. on the Comex in New York. The metal is headed for a second quarterly loss. Gold for immediate delivery fell 0.3 percent to $1,192.25 an ounce in London, according to Bloomberg generic pricing.
Strengthening physical demand for gold may still provide support, Hansen said. China imported 149,257 kilograms of gold from Hong Kong in November, up 34 percent from the previous month, according to data today from the city’s Census and Statistics Department.
Silver for March delivery fell 0.5 percent to $16.07 an ounce in New York. Platinum for April delivery dropped 0.6 percent to $1,212.90 an ounce, while palladium for March delivery declined 0.3 percent to $815.90 an ounce.
To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Jasmine Ng in Singapore at jng299@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Dan Weeks
