Gold falls in London, heads for longest decline in five months
Thursday, 13 August 2009
LONDON Aug. 12 (Bloomberg): Gold fell for a sixth day in London, heading for the longest decline in five months, as a stronger dollar curbed the metal's appeal as an alternative asset.
The dollar climbed as much as 0.4 per cent against the euro to this month's highest level ahead of the Federal Reserve's announcement today on interest rates. Bullion, which typically slides when the dollar gains, also dropped as crude oil, European and Asian equities, and U.S. index futures declined.
Gold is "under pressure mainly because of dollar strength," Walter de Wet, a Standard Bank Ltd. analyst in London, said by phone today. "Oil is down and equities are lower. These markets have a bit of a correlation at the moment" with the metal, he said.
Immediate-delivery bullion lost as much as $5.85, or 0.6 per cent, to $940.25 an ounce, the lowest price since July 31. The metal traded at $942.78 at 9:28 a.m. in London. December gold futures slipped 0.3 per cent to $944.80 an ounce on the New York Mercantile Exchange's Comex division.
Gold has dropped 3 per cent since reaching a two-month high of $971.68 an ounce on Aug. 6. It climbed to a record $1,032.70 in March 2008. Crude-oil futures, used by some investors as an inflation gauge, slid as much as 0.9 per cent to $68.84 a barrel in New York today.
The Federal Reserve is scheduled to issue its rate decision at 7:15 p.m. London time. Policy makers may acknowledge economic growth will be faster than they anticipated, while committing to keep the benchmark interest-rate target near the lowest level on record, according to analysts.
Gold's "near-term direction is likely to depend on the reaction to the Fed statement and whether the statement bolsters risk appetite or prompts a reduction in exposure," James Moore, an analyst at TheBullionDesk.com in London, said in a report.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, declined for a third day, falling 3.06 metric tons to 1,065.49 tons yesterday, data on the company's Web site show. The fund reached a record 1,134.03 tons on June 1.
The dollar climbed as much as 0.4 per cent against the euro to this month's highest level ahead of the Federal Reserve's announcement today on interest rates. Bullion, which typically slides when the dollar gains, also dropped as crude oil, European and Asian equities, and U.S. index futures declined.
Gold is "under pressure mainly because of dollar strength," Walter de Wet, a Standard Bank Ltd. analyst in London, said by phone today. "Oil is down and equities are lower. These markets have a bit of a correlation at the moment" with the metal, he said.
Immediate-delivery bullion lost as much as $5.85, or 0.6 per cent, to $940.25 an ounce, the lowest price since July 31. The metal traded at $942.78 at 9:28 a.m. in London. December gold futures slipped 0.3 per cent to $944.80 an ounce on the New York Mercantile Exchange's Comex division.
Gold has dropped 3 per cent since reaching a two-month high of $971.68 an ounce on Aug. 6. It climbed to a record $1,032.70 in March 2008. Crude-oil futures, used by some investors as an inflation gauge, slid as much as 0.9 per cent to $68.84 a barrel in New York today.
The Federal Reserve is scheduled to issue its rate decision at 7:15 p.m. London time. Policy makers may acknowledge economic growth will be faster than they anticipated, while committing to keep the benchmark interest-rate target near the lowest level on record, according to analysts.
Gold's "near-term direction is likely to depend on the reaction to the Fed statement and whether the statement bolsters risk appetite or prompts a reduction in exposure," James Moore, an analyst at TheBullionDesk.com in London, said in a report.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, declined for a third day, falling 3.06 metric tons to 1,065.49 tons yesterday, data on the company's Web site show. The fund reached a record 1,134.03 tons on June 1.