BLBG: Gold Gains in London as Weaker Dollar, 4-Day Drop Lure Buyers
By Nicholas Larkin and Kim Kyoungwha
Dec. 9 (Bloomberg) -- Gold gained in London as a weaker dollar attracted some investors to the metal after its longest losing streak since August.
The dollar slipped as much as 0.2 percent against the euro. Bullion fell for a fourth day yesterday, reaching a three-week low, as the dollar strengthened and the Bank of Korea described gold as an “illusion” and said it was unlikely to buy more. The metal and the U.S. currency typically move inversely.
“The dollar is still the excuse,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “We have fallen quite drastically. We might see bargain-hunters coming into the market.”
Gold for immediate delivery gained as much as $10.10, or 0.9 percent, to $1,138.50 an ounce and was at $1,136.02 at 9:22 a.m. local time. Bullion futures for February delivery on the New York Mercantile Exchange’s Comex unit were 0.6 percent lower at $1,136.70.
“There’s some buying on weakness in gold and oil,” said Ben Westmore, a commodities analyst with National Australia Bank in Sydney. Crude slid for a fifth day yesterday in New York.
The metal has dropped 7.3 percent since reaching a record $1,226.56 an ounce on Dec. 3, while the U.S. Dollar Index, which measures the strength of the greenback against six currencies, has gained 2.6 percent from its lowest level that day. Gold has added 29 percent this year as investors sought a hedge against a weaker dollar and potential inflation and as central banks in India and other countries added to bullion stockpiles.
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, dropped 13.72 metric tons to 1,116.25 tons yesterday, according to the company’s Web site. The slide was the biggest since July 14. The fund’s holdings reached a record 1,134 tons on June 1.
Among other metals for immediate delivery in London, silver increased 0.6 percent to $17.685 an ounce. Palladium added 0.3 percent to $371 an ounce, and platinum climbed 0.8 percent to $1,424 an ounce.
To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net
