BLBG: Gold Declines in London as Investors Sell on Stronger Dollar
By Nicholas Larkin and Kim Kyoungwha
Dec. 23 (Bloomberg) -- Gold fell for a third day in London as gains in the dollar prompted investors to sell the metal.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, traded near its highest level in more than three months, on signs of a recovery in the world’s largest economy. Gold yesterday slipped to seven-week low.
“In the run-up to year-end we expect gold to see further pockets of long liquidation, potentially pulling back to the $1,050 area,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. A stronger dollar may leave gold and silver “vulnerable to selling pressure,” he said.
Gold for immediate delivery fell $2.32, or 0.2 percent, to $1,081.68 an ounce at 11:10 a.m. local time. The past two days, gold futures have settled more than 10 percent below the record closing price, the definition of a so-called correction. Gold for February delivery in New York was 0.4 percent lower at $1,082.10 an ounce.
The metal slipped to $1,080.50 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,084 at yesterday’s afternoon fixing.
Gold has fallen 8.3 percent this month as signs of economic expansion spurred a 4.5 percent advance in the dollar against the basket of six currencies. The greenback is headed for its first monthly increase since June.
“Commodities including gold will probably remain weak as long as the dollar continues its rise,” said Park Jong Beom, a senior trader with Tongyang Futures Co. in Seoul.
Bullion, up 23 percent this year, is still headed for its ninth annual gain. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, were unchanged at 1,132.71 metric tons yesterday, according to the fund’s Web site. They reached a record 1,134 tons on June 1.
Among other precious metals for immediate delivery in London, silver was 0.4 percent lower at $16.915 an ounce. Platinum added 0.3 percent to $1,399.38 an ounce and palladium slid 1.1 percent to $354.75 an ounce.
To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin at nlarkin1@bloomberg.net
