Gold dropped for the first time in five days on speculation that Greece will unveil additional deficit cuts today, stemming a slide in the euro and cutting demand for the precious metal as a hedge.
Bullion for immediate delivery fell as much as 0.2 per cent to $US1132.80 an ounce, before trading at $US1132.95 in Singapore. Gold climbed to a six-week high of $US1137.72 yesterday as the euro and pound fell on concerns that the economic recovery in Europe may falter.
The euro rose from a nine-month low today, with Greece set to announce an extra 4.8 billion euros ($US6.5 billion) of cuts, according to a person familiar with the plan. Hiroichi Nishi, an equities manager at Nikko Cordial Securities, said the region’s biggest budget gap “is moving toward a resolution.”
"Gold has been supported by the currency markets as investors seek a safe haven," said Li Ning, an analyst at China International Futures.
"When investors are more confident about economic growth, risk appetite returns and gold loses its luster."
Gold may also fall today alongside other metals as investors sell copper on speculation that a recent rally isn’t justified. The industrial metal dropped for the first day in four after Chile, the largest producer, said it returned to full output yesterday after an earthquake knocked out power at mines.
Among other precious metals for immediate delivery, silver was little changed at $US16.8925 an ounce, platinum gained 0.2 per cent to $US1575.25 an ounce, and palladium added 0.7 per cent to $US444.25 an ounce.
