Sept. 6 (Bloomberg) -- Gold fell from a record as some investors sold metal to cover losses in the Swiss franc after the country’s central bank imposed a ceiling to the exchange rate.
The franc tumbled after the bank set a minimum exchange rate of 1.20 per euro and said it will defend the target with the “utmost determination” if needed. Ministers from Germany, Finland and the Netherlands meet today to discuss a Finnish demand for collateral in a bailout for Greece, while the Italian Senate will debate an austerity plan amid a strike.
“Those long the Swiss franc are likely long gold, so both positions are cut at the same time,” Sebastien Galy, senior currency strategist at Societe Generale SA, said today in an e- mail. The move by the Swiss bank “suggests that we will go ‘risk on’ now, which is not good for gold.”
Gold for immediate delivery fell $25.98, or 1.4 percent, to $1,874.25 an ounce at 7:46 p.m. in London. Prices earlier today touched a record $1,921.15.
On the Comex in New York, gold futures for December delivery declined $3.60, or 0.2 percent, to settle at $1,873.30 at 1:48 p.m., after touching an all-time high of $1,923.70. Floor trading on the Comex was shut yesterday for Labor Day.
“We are seeing some profit taking,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The strength in the dollar is also pushing gold down.”
The dollar rose 1.1 percent against a basket of six currencies, heading for the biggest gain since Aug. 4.
Silver futures for December delivery retreated $1.201, or 2.8 percent, to close at $41.868 an ounce on the Comex.
Platinum futures for October delivery declined $26.60, or 1.4 percent, to $1,858.20 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery slumped $33.65, or 4.3 percent, to $749.55 an ounce on the Nymex.
--With assistance from Phoebe Sedgman in Melbourne and Glenys Sim in Singapore. Editors: Millie Munshi, Steve Stroth
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