Gold, Silver Futures Fall as Dollar Rebounds on Greek Debt Woes
February 08, 2012, 7:11 PM ESTBy Joe Richter
Feb. 8 (Bloomberg) -- Gold futures fell for the third time in four sessions as the dollar’s rebound eroded demand for the metal as an alternative investment. Silver dropped from a 12- week high.
The dollar was little changed against a basket of major currencies, recovering from an eight-week low, amid speculation that Greek Prime Minister Lucas Papademos and coalition party members would fail to agree on terms for a bailout. The Greek leader held an unscheduled meeting last night with the European Commission, the European Central Bank and the International Monetary Fund on terms for a 130 billion-euro ($172 billion) rescue package.
“The ECB hasn’t yet decided whether to contribute to the Greek debt fund, and commodities are getting hit by that,” Sterling Smith, an analyst at Country Hedging in St Paul, Minnesota, said in a telephone interview. “The dollar is pushing higher as people seek safety.”
Gold futures for April delivery fell 1 percent to settle at $1,731.30 an ounce at 1:41 p.m. on the Comex in New York. The price has climbed 11 percent this year.
The Standard & Poor’s GSCI Spot Index of 24 raw materials was little changed, paring gains of as much as 1 percent.
Gold rose for an 11th consecutive year in 2011 as investors sought to diversify from equities and some currencies. Futures reached a record $1,923.70 in September.
Nasdaq OMX Group Inc. in New York and Ikon Global Markets Inc. said they will begin offering cash-settled futures linked to spot prices. The contract will trade under the symbol “NAU” and seeks to simulate the over-the-counter price of the metal.
Silver futures for March delivery fell 1.4 percent $33.704 an ounce on the Comex. Earlier, the price reached $34.52, the highest for a most-active contract since Nov. 16. The metal has jumped 21 percent this year.
On the New York Mercantile Exchange, platinum futures for April delivery jumped 0.8 percent to $1,668.10 an ounce. Palladium futures for March delivery rose 1 percent to $715.90 an ounce.
--Editors: Patrick McKiernan, Millie Munshi
To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
