BLBG: Gold Heading for Weekly Loss on Dollar Rally, Slower Growth
By Feiwen Rong
Oct. 3 (Bloomberg) -- Gold is headed for its first weekly decline in three weeks as the dollar's rally reduced investor demand for bullion and on signs the global economy is slowing.
The dollar rose to a 13-month high against the euro after European Central Bank President Jean-Claude Trichet said policy makers discussed cutting interest rates. Crude oil fell below $94 a barrel, copper dropped to a 19-month low, and lumber futures fell to 17-year low after a report showed orders to U.S. factories fell the most in almost two years in August.
Gold dropped ``with selling related to the firmer U.S. dollar and lower oil prices outweighing safe-haven related demand,'' David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, said in a report today.
Gold for immediate delivery rose 20 cents to $836.60 an ounce at 9:50 a.m. in Singapore. Bullion is headed for its first weekly decline in three weeks. Silver for immediate delivery added 0.7 percent at $10.92 an ounce.
The European currency has declined 5.5 percent against the dollar this week, the biggest four-day drop since the currency's debut in 1999. It last traded at $1.3852, from $1.3819 yesterday, when it touched $1.3748, the weakest since September 2007.
Traders increased bets that the European Central Bank will cut the main refinancing rate in coming months after the ECB yesterday held it at a seven-year high of 4.25 percent.
December-delivery gold fell 0.4 percent to $841 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange at 9:50 a.m. in Singapore.
Gold for August delivery tumbled 4 percent to 2,804 yen a gram ($834 an ounce) on the Tokyo Commodity Exchange at 10:50 a.m. local time.
To contact the reporter on this story: Feiwen Rong in Singapore at firstname.lastname@example.org