BLBG: Gold Drops as 10th Annual Gain Prompts Investor Selling; Silver Also Fall
Gold declined after last year’s rally, the 10th annual advance, prompted some investors to sell, and as demand dropped on a strengthening dollar. Palladium also fell.
Gold for immediate delivery dropped as much as 0.5 percent to $1,414.15 an ounce and traded at $1,418.70 at 1:43 p.m. in Seoul. The February-delivery contract lost 0.2 percent to $1,419 an ounce on the Comex in New York.
“Gold had a very good year last year,” said Lee Joon, a senior trader at Woori Futures Co. in Seoul. “This is profit- taking after the rally, which does not seem to be that worrisome. This week is a very important week to set the tone for the year, I guess, amid high expectations for another good year.”
Bullion rallied 30 percent last year, the biggest yearly advance since 2007, climbing to an all-time high $1,431.25 an ounce on Dec. 7, as Europe’s debt woes and declining currencies boosted demand. The Federal Reserve kept U.S. borrowing costs low and purchased bonds to help revive the economy.
Gold priced in euros, British pounds and Swiss francs also rose to all-time highs last year as the European Union bailed out Greece and Ireland. Holdings in exchange-traded products, or ETPs, backed by bullion gained 17 percent.
The Dollar Index, which gauges the currency’s strength against six counterparts, climbed for the first time in eight days after a Chinese report showed manufacturing grew at a slower-than-expected pace in December, boosting demand for safer assets. Precious metals typically move inversely to the dollar.
Silver Assets
Silver for immediate delivery traded little changed at $30.8988 an ounce, paring an earlier loss of as much as 0.8 percent. The metal surged 83 percent last year, the biggest gain since 1979. Silver assets in ETPs gained 2.85 metric tons to 15,074.54 tons as of Dec. 31, data from four providers show. Holdings reached 15,172.49 tons on Dec. 17, the highest since at least February.
Palladium for immediate delivery lost 0.6 percent to $797.13 an ounce. Earlier today, and also on Dec. 31, the price reached $803.50 an ounce, the highest level since March 2001. The metal soared 97 percent last year after more than doubling in 2009.
Immediate-delivery platinum was 0.2 percent higher at $1,774.25 an ounce. The metal gained 21 percent last year.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
