Bloomberg News

Gold Falls to One-Week Low as Dollar Gain Erodes Investor Demand

February 07, 2012

Feb. 6 (Bloomberg) -- Gold fell to the lowest price in more than a week as a rally in the dollar curbed demand for the metal as an alternative investment.

The dollar climbed as much as 0.8 percent against a basket of currencies after European Union President Herman Van Rompuy said he can’t be sure that Greece will solve its debt crisis. Gold slumped 1.1 percent on Feb. 3 after a report showed U.S. non-farm payrolls rose more than economists had predicted.

“People are in a risk-off mode today as investors are finding it very difficult to stomach the roller coaster ride in Greece,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview.

Gold futures for April delivery fell 0.9 percent to settle at $1,724.90 an ounce at 1:40 p.m. on the Comex in New York. Earlier prices touched $1,714, the lowest since Jan. 26.

Gold may top $2,000, though it is unlikely to stay much above that level, Tom Kendall, the head of precious-metals research at Credit Suisse AG’s securities unit, said in a presentation at the Investing in African Mining Indaba in Cape Town today.

Silver futures for March delivery rose less than 0.1 percent to $33.75 an ounce.

On the New York Mercantile Exchange, platinum and palladium declined for the first time in four sessions. Platinum futures for April delivery retreated 0.1 percent to $1,629.80 an ounce. Palladium futures for March delivery fell 0.4 percent to $705.95 an ounce.

--Editors: Thomas Galatola, Patrick McKiernan

To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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