Gold is seen declining for a second day and extending a fourth monthly loss in London on speculation a stronger dollar will curb demand for the metal as an alternative asset.
The dollar reached a 21-month high versus six major currencies after a report indicated Chinese manufacturing grew less than forecast last month and as leaders of Italy and the European Central Bank clashed with Germany by demanding bolder steps to stabilize euro-area economies. Hiring in the U.S. probably picked up in May following the smallest gain in six months, economists said before a government report today.
“On any sign of a strengthening dollar, you’ll see people trying to take profits in gold at some point,” Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said by phone today. “The non-farm payrolls will drive the market” later today, he said.
Bullion for immediate delivery fell 0.2 percent to $1,557.82 an ounce by 9:12 a.m. in London. Prices dropped 6.3 percent in May for a fourth monthly decline, the longest losing run since 1999. August-delivery futures were 0.3 percent lower at $1,558.80 on the Comex in New York.
The metal is down 0.4 percent this year after 11 consecutive annual increases. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, were unchanged at 1,270.3 metric tons yesterday, the company’s website showed.
Gold slumped last month as the Dollar Index gained 5.4 percent on mounting concern that Europe’s debt crisis is deepening. Italian Prime Minister Mario Monti and ECB President Mario Draghi pushed Germany to give up its opposition to direct euro-area aid for struggling banks.
U.S. Payrolls climbed by 150,000 workers following a 115,000 April increase, according to economists surveyed by Bloomberg News. The unemployment rate held at a three-year low of 8.1 percent, the figures may show.
Silver for immediate delivery rose 0.2 percent to $27.745 an ounce. Prices slipped 11 percent last month and are down for a sixth straight week, the worst performance since 2009. Palladium fell 0.8 percent to $607.25 an ounce after last month’s 10 percent slump. Platinum was 1.1 percent lower at $1,399.25 an ounce. It declined 9.7 percent in May and is set for a ninth consecutive weekly drop, the longest losing run since at least 1987.
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