BLBG: Gold, Little Changed in London, May Rise as Dollar Rally Stalls
By Nicholas Larkin
Aug. 10 (Bloomberg) -- Gold, little changed in London today, may gain as a stall in the dollar’s rally increases the metal’s appeal as an alternative investment.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, declined as much as 0.3 percent today after climbing to a one-week high on Aug. 7. Gold tends to rise when the currency weakens.
“It’s still basically dollar-driven,” Bernard Sin, head of currency and metals trading at Swiss bullion refiner MKS Finance SA, said by telephone from Geneva. “Fundamentally it’s still a bit bullish,” he said, adding that the metal may climb as high as $960 an ounce today.
Immediate-delivery bullion lost 98 cents, or 0.1 percent, to $953.97 an ounce by 10:14 a.m. in London after posting its fourth straight weekly gain last week. December gold futures slipped 0.3 percent to $956.10 an ounce on the New York Mercantile Exchange’s Comex division.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, slipped 3.97 metric tons to 1,068.9 metric tons on Aug. 7, data on the company’s Web site show. The fund reached a record 1,134.03 tons on June 1.
“With physical demand very low and ETF investors carrying out further pockets of redemptions, the metal is reliant on further fund/speculative buying to fuel rallies,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures by 12 percent in the week ended Aug. 4, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 193,514 contracts on Comex.
Silver for immediate delivery in London lost 0.8 percent to $14.505 an ounce. Platinum fell 1 percent to $1,251 an ounce, and palladium was 0.5 percent lower at $274 an ounce.
Palladium held in ETF Securities Ltd.’s exchange-traded commodities rose 2.7 percent to a record 355,717 ounces on Aug. 7, according to the company’s Web site. Platinum holdings added 0.6 percent to 325,185 ounces on Aug. 7, the data show.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
