Gold erases decline, copper falls
Wednesday, 3 June 2009
LONDON, June 2 (Bloomberg): Gold erased a decline in London to trade little changed as the US Dollar Index pared a gain, increasing the metal's appeal as an alternative investment.
Bullion for immediate delivery rose 8 cents to $975.35 an ounce by 11:06 a.m. local time. The metal earlier fell as much as 0.6 per cent
Copper fell from the highest in more than seven months in London as a rebound in the dollar dragged commodities lower and some investors said gains were too rapid.
The US Dollar Index, a gauge of the greenback against six major currencies, rose as much as 0.4 per cent, the first advance in four days. A stronger dollar makes commodities priced in the currency more expensive for investors holding euros and pounds.
"The upward move in prices during the last few days has been phenomenal," Alex Heath, head of industrial metals trading at RBC Capital Markets in London, said by phone today. "People question the speed of the recovery."
Three-month delivery copper on the London Metal Exchange fell $70, or 1.4 per cent, to $5,005 a metric ton by 9:29 a.m. in London, after earlier rising to $5,145 a ton, the highest since Oct. 15. Copper futures for July dropped 1.2 per cent to $2.291 a pound on the New York Mercantile Exchange's Comex division.
China's Purchasing Managers' Index came in yesterday at 53.1 in May, the third straight reading of more than 50, which indicates expansion, the Federation of Logistics and Purchasing said. The country is the world's largest consumer of copper.
Stockpiles of copper in warehouses monitored by the LME slid for an 18th straight session to 309,225 tons, the lowest since Dec. 12. Inventories have declined 44 per cent from a high this year on Feb. 25 as China bought metal to increase reserves.
Bullion for immediate delivery rose 8 cents to $975.35 an ounce by 11:06 a.m. local time. The metal earlier fell as much as 0.6 per cent
Copper fell from the highest in more than seven months in London as a rebound in the dollar dragged commodities lower and some investors said gains were too rapid.
The US Dollar Index, a gauge of the greenback against six major currencies, rose as much as 0.4 per cent, the first advance in four days. A stronger dollar makes commodities priced in the currency more expensive for investors holding euros and pounds.
"The upward move in prices during the last few days has been phenomenal," Alex Heath, head of industrial metals trading at RBC Capital Markets in London, said by phone today. "People question the speed of the recovery."
Three-month delivery copper on the London Metal Exchange fell $70, or 1.4 per cent, to $5,005 a metric ton by 9:29 a.m. in London, after earlier rising to $5,145 a ton, the highest since Oct. 15. Copper futures for July dropped 1.2 per cent to $2.291 a pound on the New York Mercantile Exchange's Comex division.
China's Purchasing Managers' Index came in yesterday at 53.1 in May, the third straight reading of more than 50, which indicates expansion, the Federation of Logistics and Purchasing said. The country is the world's largest consumer of copper.
Stockpiles of copper in warehouses monitored by the LME slid for an 18th straight session to 309,225 tons, the lowest since Dec. 12. Inventories have declined 44 per cent from a high this year on Feb. 25 as China bought metal to increase reserves.