BLBG: Gold Futures Fall Most in a Week as Dollar Climbs Against Euro
By Nicholas Larkin and Pham-Duy Nguyen
March 4 (Bloomberg) -- Gold futures fell the most in more than a week as the advancing dollar reduced demand for the metal as an alternative investment.
The greenback rose as much as 1.1 percent against the euro as the European Central Bank extended some economic-stimulus measures and left its benchmark interest rate unchanged at 1 percent. Gold rose 24 percent last year as the euro gained 2.5 percent against the U.S. currency.
“The dollar is only going to get stronger and stronger,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “Everybody is beginning to realize that the ECB is cooked because the Greek problem is not going to go away. Investors will go back to the dollar, and gold goes lower.”
Gold futures for April delivery slid $10.20, or 0.9 percent, to $1,133.10 an ounce on the New York Mercantile Exchange’s Comex unit, the biggest drop for a most-active contract since Feb. 23.
The euro also fell after German Chancellor Angela Merkel said a meeting tomorrow with Greek Prime Minister George Papandreou won’t focus on “aid commitments.” Demonstrators occupied the Greek finance ministry today to protest planned budget cuts.
“If the dollar continues to strengthen, we might see a halt in gold,” said Sagiv Perez, a senior dealer at Finotec Trading U.K. in London.
Also in New York, silver futures for May delivery fell 15.3 cents, or 0.9 percent, to $17.176 an ounce. Platinum futures for April delivery gained 10 cents to $1,583.60 an ounce.
Palladium rose, capping the longest rally since October. Futures for June delivery climbed $12.70, or 2.8 percent, to $463.20 an ounce, the sixth straight gain.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
