Gold fell, extending its decline from a record last week, as a rising US dollar and falling equities weighed on investor confidence.
The Dollar Index, a six-currency gauge of the greenback’s strength, climbed for a second day amid weaker Asian equity markets and on speculation European finance ministers will discuss gains by the euro at a meeting today. Oil also declined as the stronger US dollar reduced the investment appeal of physical assets investors have been buying as a hedge against inflation.
“The whole market is expecting to see some consolidation first before another round of buying could come back” into gold, said Kate Harada, a senior trader with Mitsubishi Corp. Futures & Securities Ltd. in Tokyo.
Gold for immediate delivery fell as much as 0.5 per cent to $US1,048.38 an ounce and traded at $US1,049.78 at 9:28 a.m. in Singapore. The Dollar Index advanced 0.3 per cent to 75.82.
Gold prices, which have risen on an annual basis for eight straight years, touched a record $US1,070.80 an ounce on Oct. 14. The metal jumped 19 per cent this year as a weaker US dollar and rising government debt spurred inflation concerns.
Bullion prices were expected to fall this week by nine of 16 traders, investors and analysts surveyed by Bloomberg on Oct. 15. Five forecast higher prices and two were neutral.
Among other precious metals, silver fell 0.8 per cent to $US17.33 an ounce, platinum eased 0.2 per cent to $US1,340.25 an ounce and palladium gained 0.2 per cent to $US329.75 an ounce.
