Gold Snaps 4-Day Gain as Rally to Highest in a Month

Gold Heads for Best Run Since April
July 11, 2013
Gold Set for Best Weekly Run Since March
July 26, 2013
Show all

Gold Snaps 4-Day Gain as Rally to Highest in a Month

Gold halted a four-day advance after the rally to a one-month high spurred some investors to sell the metal. Silver, platinum and palladium declined.

Spot gold fell as much as 0.5 percent to $1,338.60 an ounce, and traded at $1,341.51 at 2:27 p.m. in Singapore, after rising 5.4 percent in the four days through yesterday. Prices earlier gained to $1,348.65, the highest since June 20. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 currencies, added 0.2 percent following three days of losses.

Gold has risen 8.7 percent in July, set for the best month since January 2012, as the Bloomberg Dollar Index dropped 1.1 percent, after U.S. Federal Reserve Chairman Ben S. Bernanke indicated that it’s too early to decide whether to begin scaling back its quantitative-easing program in September. Assets in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, fell for a sixth day yesterday to 929.76 metric tons, the least since February 2009.

“After the recent rally, bullion may consolidate in the near term,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based precious metals trader and refiner. “Gold has been pressured by the expectation of a slowdown in the pace of asset purchases by the Fed. Any sign of weakness in the U.S. economy will help gold.”

The Fed, which buys $85 billion of assets a month to spur the recovery and cut the jobless rate, is likely to start tapering at its Sept. 17-18 meeting, Jan Hatzius, Goldman Sachs Group Inc. chief economist, wrote in a client note. Gold, down 20 percent this year, is set to halt a 12-year bull run.

China Slows

China’s manufacturing weakened further in July, according to a preliminary survey of purchasing managers today, signaling that demand for gold in the world’s second-largest consumer may slow. The volume for Shanghai’s benchmark spot contract increased to 13,599 kilograms yesterday, rebounding from a two-day drop. Volumes reached a record 43,272 kilograms on April 22.

Gold for December delivery advanced as much as 0.9 percent to $1,347.40 an ounce on the Comex in New York, before trading at $1,341.40. Futures climbed to $1,349.20 yesterday, the highest level since June 20.

Silver for immediate delivery fell as much as 1.4 percent to $20.1963 an ounce before trading at $20.3665, declining for a second day. Spot platinum slid 0.3 percent to $1,442.85 an ounce, and palladium retreated 0.3 percent to $738.55 an ounce.

Comments are closed.