Gold falls as dollar's advance may curb demand from investors
Tuesday, 27 April 2010
LONDON, April 26 (Bloomberg): Gold fell from a one-week high in London as the dollar's advance against the euro may curb demand from investors seeking an alternative investment.
The dollar extended gains against the euro as Greece moved toward getting an emergency aid package before debts come due next month. The metal priced in euros and Swiss francs earlier climbed to records. Gold priced in dollars last year moved inversely to the US currency.
"The market is confused whether to follow the euro or the dollar," said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. "If the dollar is strong, then naturally gold should go lower."
Gold for immediate delivery dropped $1.35, or 0.1 per cent, to $1,156.25 an ounce at 9:44 a.m. local time, after earlier trading at $1,160.10, the highest price since April 16.
Bullion futures for June delivery climbed 0.2 per cent to $1,156.40 on the Comex in New York.
"The market is quite balanced in a range between $1,130 and $1,160 for now," said Ellison Chu, a manager at Standard Bank Asia Ltd. in Hong Kong. "In the longer term, we expect gold to move higher, because I'm still bearish on the dollar."
The Federal Open Market Committee of the Federal Reserve in two days may keep the benchmark interest rate unchanged, economists said. The Fed has kept rates at zero to 0.25 per cent since December 2008, helping send the dollar down and gold in dollars to a record in December.
The dollar extended gains against the euro as Greece moved toward getting an emergency aid package before debts come due next month. The metal priced in euros and Swiss francs earlier climbed to records. Gold priced in dollars last year moved inversely to the US currency.
"The market is confused whether to follow the euro or the dollar," said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. "If the dollar is strong, then naturally gold should go lower."
Gold for immediate delivery dropped $1.35, or 0.1 per cent, to $1,156.25 an ounce at 9:44 a.m. local time, after earlier trading at $1,160.10, the highest price since April 16.
Bullion futures for June delivery climbed 0.2 per cent to $1,156.40 on the Comex in New York.
"The market is quite balanced in a range between $1,130 and $1,160 for now," said Ellison Chu, a manager at Standard Bank Asia Ltd. in Hong Kong. "In the longer term, we expect gold to move higher, because I'm still bearish on the dollar."
The Federal Open Market Committee of the Federal Reserve in two days may keep the benchmark interest rate unchanged, economists said. The Fed has kept rates at zero to 0.25 per cent since December 2008, helping send the dollar down and gold in dollars to a record in December.