Jan. 13 (Bloomberg) -- Gold fell the most in two weeks, as a rebounding dollar and slumping equity markets eroded demand for commodities.
The MSCI All-Country World Index of equities fell as much as 1.3 percent as France and Austria face downgrades by Standard & Poor’s, according to government officials and people familiar with the matter. The S&P GSCI Spot Index of 24 raw materials retreated as much as 1.2 percent amid concern that Europe’s financial crisis may worsen. The dollar rose to the highest in almost 16 months against a basket of major currencies.
“People are in a risk-off mode today,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview. “The rising dollar and weak equities are pushing gold down.”
Gold futures for February delivery fell 1 percent to settle at $1,630.80 an ounce at 1:47 p.m. on the Comex in New York, the biggest decline since Dec. 29. Prices have still climbed 0.9 percent this week.
The precious metal rose 10 percent in 2011, an 11th consecutive annual gain, as investors sought to diversify away from equities and some currencies.
Bullion will climb to $1,940 in 12 months, Goldman Sachs Group Inc. said in a report today, as it maintained a forecast for commodities to gain 15 percent as economic growth in the U.S. and China offsets the effect of a European recession.
Also on the Comex, silver futures for March delivery fell 2 percent to $29.522, an ounce in New York.
On the New York Mercantile Exchange, platinum futures for April delivery retreated 0.8 percent to $1,488.80 an ounce. Palladium futures for March delivery fell 1 percent to $635.05 an ounce.
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