Gold may decline for a second day in New York after dropping to the lowest level in almost four months on reduced demand for a protection of wealth.
Bullion is down 1.8 percent this week, set for a fourth weekly loss and the longest losing streak in almost a year. Prices have dropped as the MSCI World Index of shares yesterday climbed to the highest level in more than two years and as exchange-traded product holdings fell to a seven-month low. The Federal Reserve this week said the U.S. still needs stimulus to cut unemployment.
Optimism is generally rising at present and the risk appetite of market players is also increasing, said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. The demand for safe haven has dropped considerably.
Gold futures for April delivery lost $2.30, or 0.2 percent, to $1,317.50 an ounce at 7:42 a.m. on the Comex in New York, after earlier falling to $1,309.10, the lowest level since Oct. 1. The metal for immediate delivery in London was 0.2 percent higher at $1,316.78.
Bullion fell to $1,316 an ounce in the morning fixing in London, used by some mining companies to sell output, from $1,334.50 at yesterdays afternoon fixing.
Gold jumped 30 percent last year after governments spent trillions of dollars and kept interest rates low to bolster economies. Europes sovereign-debt crisis also boosted the metals allure. The MSCI World Index gained after the Fed this week said it would continue to support the recovery even as growth accelerates. Gold reached a record $1,432.50 on Dec. 7.
Reducing Investor Appetite
Higher equities are reducing investor appetite for safe- haven gold, Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., said in a report today. Appetite for gold has waned as other markets looked more attractive.
Gold held through ETPs fell for a fourth day to 2,037.48 metric tons yesterday, data compiled by Bloomberg from 10 providers show. Thats the lowest level since June 11. Holdings reached a record 2,114.6 tons last month.
Silver for March delivery in New York declined 0.9 percent to $26.775 an ounce, after falling to $26.30, the lowest price since Nov. 18. Silver ETP holdings slipped 21.27 tons to 14,605.08 tons yesterday, the lowest level since Nov. 9, data from four providers show.
Palladium for March delivery lost 0.8 percent to $807 an ounce. Platinum for April delivery was 0.6 percent lower at $1,792.50 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at [email protected]; Jae Hur in Tokyo at [email protected]
To contact the editor responsible for this story: Claudia Carpenter at [email protected].
