SF: Gold May Drop as Investors Reduce Holdings After Annual Rally
Dec. 24 (Bloomberg) -- Gold, trading little changed in Asia, swung between gains and losses as some investors sold to bank gains from this year's rally, the 10th annual advance. Platinum climbed and silver was also little changed.
Immediate-delivery bullion lost and gained as much as 0.3 percent before trading 10 cents higher at $1,380.20 an ounce at 10:30 a.m. in Seoul. Yesterday, the February-delivery contract declined 0.5 percent to $1,380.50 on the Comex in New York, the biggest drop since Dec. 16. The futures market is closed today for the Christmas holiday.
"Investors go on holidays and just want to shore up their earnings," said Ben Westmore, an analyst at National Australia Bank Ltd. in Melbourne. The metal remains well-supported and "on annual average terms we see 2011 being a better year than 2010," he said by phone.
Gold, which reached an all-time high of $1,431.25 an ounce on Dec. 7, has climbed 25 percent this year as investors sought protection from weakening currencies and Europe's sovereign-debt crisis. That advance tops returns from U.S. stocks, with the Standard & Poor's 500 Index gaining by 13 percent this year.
Gold assets in exchange-traded products fell for a third day, losing 3.12 metric tons to 2,101.27 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,114.6 tons on Dec. 20 and have climbed 17 percent this year.
Eleven of 19 traders, investors and analysts surveyed by Bloomberg, or 58 percent, said that the metal will rise next week on concern that Europe's debt woes will continue to boost demand for wealth protection. Five predicted lower prices and three were neutral.
Silver for immediate delivery was little changed at $29.3250 an ounce, advancing 0.6 percent this week. The price has gained 74 percent in 2010.
Cash palladium was 0.2 percent higher at $754.25 an ounce, heading for a second weekly increase. The metal has surged 85 percent this year.
Platinum for immediate delivery rose 0.7 percent to $1,730.50 an ounce, set for a second weekly gain. The price has gained 18 percent this year.
--With assistance from Nicholas Larkin in London. Editors: Jake Lloyd-Smith, Wendy Pugh
