Gold falls in London as stronger dollar curbs investment demand
Friday, 3 July 2009
LONDON, July 2 (Bloomberg): Gold declined in London for a third day this week as a stronger dollar reduced demand for the precious metal as an alternative investment.
The US Dollar Index, a six-currency measure of the greenback's value, gained as much as 0.5 per cent today after a Chinese Foreign Ministry official said he was "not aware" of a plan to discuss a new reserve currency at next week's Group of Eight meeting. The dollar also strengthened against the euro before a meeting at which European Central Bank policy makers will probably leave the benchmark interest rate at a record low.
"The US dollar reserve currency debate, lower demand in the summertime and lower ETF holdings could continue to drive the market," Pradeep Unni, a Richcomm Global Services analyst Dubai, said in a note, referring to exchange-traded funds.
Bullion for immediate delivery slid $3.66, or 0.4 per cent, to $937.14 an ounce at 9:47 a.m. in London. It gained 1.5 per cent yesterday after two declines in a row. August gold futures fell 0.4 per cent to $937.40 an ounce on the New York Mercantile Exchange's Comex division.
Gold, which typically moves inversely to the dollar, lost 5.4 per cent last month, while the dollar index added 1 per cent. A report today may show the US unemployment rate rose to a 26- year high, according to a Bloomberg News survey of economists. That may spur demand for major currencies as a refuge.
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged at 1,120.55 metric tons yesterday after dropping by 5.19 tons on the previous day, the company's Web site showed. Bullion held in ETF Securities Ltd.'s exchange- traded commodities added 0.7 per cent to 7.64 million ounces yesterday, its Web site showed.
Silver for immediate delivery in London lost 0.5 per cent to $13.685 an ounce. Platinum dropped 1.1 per cent to $1,189.20 an ounce, and palladium was 1 per cent lower at $252.50 an ounce.
The US Dollar Index, a six-currency measure of the greenback's value, gained as much as 0.5 per cent today after a Chinese Foreign Ministry official said he was "not aware" of a plan to discuss a new reserve currency at next week's Group of Eight meeting. The dollar also strengthened against the euro before a meeting at which European Central Bank policy makers will probably leave the benchmark interest rate at a record low.
"The US dollar reserve currency debate, lower demand in the summertime and lower ETF holdings could continue to drive the market," Pradeep Unni, a Richcomm Global Services analyst Dubai, said in a note, referring to exchange-traded funds.
Bullion for immediate delivery slid $3.66, or 0.4 per cent, to $937.14 an ounce at 9:47 a.m. in London. It gained 1.5 per cent yesterday after two declines in a row. August gold futures fell 0.4 per cent to $937.40 an ounce on the New York Mercantile Exchange's Comex division.
Gold, which typically moves inversely to the dollar, lost 5.4 per cent last month, while the dollar index added 1 per cent. A report today may show the US unemployment rate rose to a 26- year high, according to a Bloomberg News survey of economists. That may spur demand for major currencies as a refuge.
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged at 1,120.55 metric tons yesterday after dropping by 5.19 tons on the previous day, the company's Web site showed. Bullion held in ETF Securities Ltd.'s exchange- traded commodities added 0.7 per cent to 7.64 million ounces yesterday, its Web site showed.
Silver for immediate delivery in London lost 0.5 per cent to $13.685 an ounce. Platinum dropped 1.1 per cent to $1,189.20 an ounce, and palladium was 1 per cent lower at $252.50 an ounce.