Gold, little changed in London today and set for a second monthly drop, may decline as a stronger dollar curbs the metal’s appeal as an alternative investment. The U.S. Dollar Index, a six currency gauge of the strength of the greenback, traded near a five month high. The dollar has strengthened on concern Greece’s fiscal problems will spread, damping demand for European assets, and as the U.S. economy expanded more last quarter than economists expected. Gold, down 1.2 percent this month, typically moves inversely to the dollar.
“Speculators are still liquidating gold, with no physical buying in sight,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “Bullion is still trading on the back of swinging currency markets.” Gold for immediate delivery lost $3.42, or 0.3 percent, to $1,083.68 an ounce at 1:58 p.m. local time. The metal is down 0.9 percent this week, heading for a third decline. Bullion for April delivery was little changed at $1,084.60 on the New York Mercantile Exchange’s Comex unit.
The metal declined to $1,082.75 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,088 at yesterday’s afternoon fixing. Spot prices are 12 percent below a record $1,226.56 set on Dec. 3. “Further gains in the dollar would keep gold on the defensive,” said Toby Hassall, an analyst with CWA Global Markets Pty in Sydney. “Prices are finding support at the level of December’s lows”....Read the entire article.
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