Gold for immediate delivery declined as the dollar strengthened, paring investors’ demand for the metal as an alternative to currencies. Silver reversed a fall to climb to the highest price since March 1980.
Spot gold dropped for the first day in four, losing as much as 0.4 percent to $1,403.65 an ounce before trading at $1,407.35 at 9:55 a.m. in Singapore. Bullion jumped to an all-time high of $1,410.60 yesterday on concern that European governments may struggle to pay debt. Gold has surged 28 percent this year.
The Dollar Index, which tracks the U.S. currency against six counterparts, rose as much as 0.3 percent today. Gold, which is on course for a 10th annual gain, typically moves inversely to the dollar.
Some investors may regard the $1,400 mark “as some sort of resistance level,” Park Jong Beom, a trader at Tong Yang Futures Trading Co., said in Seoul, referring to a point where “sell” orders may be clustered. “Still, it would be hard to see gold fall significantly from here because investor demand for a safe-haven asset is increasing.”
Gold for December delivery climbed as much as 0.5 percent to $1,410.10 an ounce on the Comex in New York, and traded at $1,406.90. The contract reached an all-time high of $1,410.40 an ounce yesterday.
Ireland is seeking support from the European Union this week to avoid a Greek-style bailout as investors shunned buying the country’s bonds. Gold reached a previous record in June when investors were concerned that Greece would go bankrupt.
‘Bought on Dips’
“Gold will benefit from any sovereign-debt fallout,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “Gold is going to continue to be bought on dips because no one believes the dollar can stage a significant rally.”
Citigroup Inc. increased its 2011 forecasts for precious and industrial metals in a report dated Nov. 7. The gold estimate was increased almost 18 percent to $1,444 an ounce, according to the report.
World Bank President Robert Zoellick said yesterday that Group-of-20 economies should evaluate using gold as a reference point for market expectations about inflation, deflation and currency values.
While textbooks may view gold as “old money,” markets use it today as an alternative monetary asset, Zoellick wrote in a commentary in the Financial Times. Leaders from the G-20 gather in Seoul on Nov. 11-12.
“A surprise comment from the World Bank President that world leaders should consider returning to a gold standard to help set exchange rates ahead of the G20 summit this week added to the positive gold-price momentum,” Mark Pervan and Natalie Robertson, Melbourne-based analysts at Australia & New Zealand Banking Group Ltd., wrote in a report today.
Silver for immediate delivery advanced as much as 0.4 percent to $27.8625 an ounce, the highest price since March 1980, before trading at $27.8475. An ounce of gold bought as little as 50.4817 ounces of silver today, the least since March 18, 2008.
Cash palladium gained 0.5 percent to $712.13 an ounce, while spot platinum dropped 0.1 percent to $1,770.88 an ounce.
(source:bloomberg.com)
No comments:
Post a Comment