Gold declined for a third day as the dollar’s strength damped demand for alternative investments, countering record holdings in exchange-traded products. Silver slumped to a one-month low.
Spot gold fell as much as 0.6 percent to $1,686.70 an ounce, before trading at $1,689.20 at 3:47 p.m. in Singapore. Bullion slid to a one-month low of $1,684.77 an ounce on Dec. 7.
The dollar strengthened 0.1 percent against a basket of six major currencies including the yen after Shinzo Abe’s victory in Japan’s general election increased expectations that the central bank will add to stimulus. Gold increased 8 percent this year as central banks from the U.S. to China and Europe took action to prop up economies, debasing currencies and increasing haven demand. Abe has called for unlimited easing to revive growth.
“Headlines about potential stimulus are having little impact on the market at a time of light end-of-year trading,” said Xiang Nan, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Investment demand is holding up well, however the market needs buying on the physical side to move higher.”
Holdings in ETPs expanded 12 percent this year to 2,630.703 metric tons on Dec. 14, data compiled by Bloomberg show. In the physical market, the U.S. Mint has sold 35,500 ounces of gold coins so far in December, according to figures on the Mint’s website. At that pace, total sales for the month would be up 8.4 percent from a year earlier to 71,000 ounces, compared with 136,500 ounces in November.
Gold for February delivery slipped 0.4 percent to $1,690 an ounce on the Comex in New York. While money managers raised net- long positions in gold futures and options by 3 percent to 129,865 contracts in the week ended Dec. 11, the total number of speculative long positions fell 1.2 percent, dropping for a second week, U.S. Commodity Futures Trading Commission data show.
Cash silver lost as much as 0.5 percent to $32.1050 an ounce, the least expensive since Nov. 16, before trading at $32.1875. It’s still the best performing precious metal this year, rising 16 percent.
Spot platinum dropped 0.5 percent to $1,609.24 an ounce, and palladium declined 0.3 percent to $700.50 an ounce.
Source: Bloomberg
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