Gold Futures Decline From Seven-Week High as Dollar Rebounds
November 10, 2011, 2:34 AM ESTBy Debarati Roy and Nicholas Larkin
Nov. 9 (Bloomberg) -- Gold futures declined from a seven- week high as the dollar’s surge curbed demand for the precious metal as an alternative investment.
The greenback headed for the biggest gain since August 2010 against a basket of major currencies. Earlier, gold topped $1,800 an ounce amid leadership changes and debt turmoil in Italy and Greece.
“A stronger dollar will keep buying interest in precious metals muted,” Marc Ground, an analyst at Standard Bank Plc, said in a report. “We have seen some support from investors buying on dips.”
Gold futures for December delivery fell 0.4 percent to close at $1,791.60 at 1:59 p.m. on the Comex in New York. After the settlement, the price touched $1,772.20.
Yesterday, the metal reached $1,804.40, the highest for a most-active contract since Sept. 21. The commodity has climbed 26 percent this year.
Italian bonds slumped today, driving yields to euro-era records, after LCH Clearnet SA raised the deposit it demands for trading the securities. Prime Minister Silvio Berlusconi’s offer to resign left his weakened government struggling to implement austerity measures to reduce borrowing costs.
“We may see a flight to cash because the situation in Italy looks very grave,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.
Silver futures for December delivery fell 2.3 percent to $34.361 an ounce, ending a two-day rally.
On the New York Mercantile Exchange, platinum futures for January delivery fell 1.8 percent to $1,643.70 an ounce. Palladium futures for December delivery slumped 3.3 percent to $654.85 an ounce, the biggest drop since Oct. 20.
--With assistance from Paul Dobson in London. Editors: Patrick McKiernan, Steve Stroth
To contact the reporters for this story: Debarati Roy in New York at droy5@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net;
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
