Gold is set to decline in London as the biggest gain in four weeks after Europe’s leaders agreed to address flaws in their bailout programs spurs some investors to sell the metal.
Gold jumped 2.9 percent on June 29, the most since June 1, as the euro rallied after the region’s leaders eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy. Hedge funds and other speculators cut wagers on higher bullion prices by 20 percent in the week ended June 26, Commodity Futures Trading Commission data show.
“You had a very strong price increase on Friday,” Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “It’s normal that there is a bit of profit taking. The market has to digest the gains first.”
Bullion for immediate delivery fell 0.2 percent to $1,594 an ounce by 9:34 a.m. in London. August-delivery futures were 0.6 percent lower at $1,594.60 on the Comex in New York.
The metal is up 1.9 percent this year even after plunging 4.3 percent in the previous three months, the worst quarterly performance since 2008. Holdings in gold-backed exchange-traded products declined 1.3 metric tons to 2,407.8 tons on June 29 and are about 0.1 percent from the all-time high set in March, data compiled by Bloomberg show.
Euro-area leaders dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks last week. Lenders can also be recapitalized directly with European bailout funds rather than being channeled through governments, European Union President Herman Van Rompuy said after a two-day summit.
Silver for immediate delivery fell 0.3 percent to $27.4025 an ounce. Palladium dropped 0.6 percent to $579.46 an ounce. Platinum was down 0.4 percent at $1,440.75 an ounce.
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