Oct. 31 (Bloomberg) -- Gold futures dropped the most in more than a week after the dollar surged, reducing demand for the precious metal as an alternative investment.
The greenback rose the most in more than a month against a basket of six currencies after Japan took steps to weaken the yen. Last week, gold jumped 6.8 percent, the most since January 2009, helping the metal gain 6.3 percent for the month.
“We are seeing a ‘shoot first and ask questions later’ mindset because of the news out of Japan,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in a telephone interview. “Also, the strength in the dollar is a perfect excuse for some profit- taking.”
Gold futures for December delivery fell 1.3 percent to settle at $1,725.20 an ounce at 1:39 p.m. on the Comex in New York, the biggest decline for a most-active contract since Oct. 20.
Jun Azumi, Japan’s finance minister, said the government acted after the yen rose to a post-World War II high against the dollar.
“The Bank of Japan has intervened heavily in the currency market,” Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said in a telephone interview.
The Royal Canadian Mint announced an initial public offering of new exchange-traded receipts backed by physical gold held in facilities in Ottawa.
Silver futures for December delivery fell 2.6 percent to $34.354 an ounce on the Comex. This month, the metal climbed 14 percent. In September, the price tumbled 28 percent, the most since April 1980.
On the New York Mercantile Exchange, platinum futures for January delivery slumped 2.7 percent to $1,607.60 an ounce. The metal climbed 5.5 percent in October.
Palladium futures for December delivery fell 2.6 percent to $651.15 an ounce. The metal advanced 6 percent this month.
--Editors: Patrick McKiernan, Steve Stroth
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