Gold may fall as investors cover losses in commodities, equities
6/13/2011Gold may decline for a second day in New York as some investors sell the metal to cover losses in other commodities markets and equities.
Crude oil declined for a second day in New York before reports that may show slowing economic growth in the U.S. and China, while tin led industrial metals lower on the London Metal Exchange. The MSCI All-Country World Index of equities touched the lowest level in more than two months. European leaders are struggling to find common ground on a Greek bailout.
“Weaker commodities and equity sentiment” is pressuring precious metals, James Moore, an analyst at TheBullionDesk.com in London, said today in a report. Still, “the mix of safe- haven diversification and negative real-interest rates continue to create a positive price environment for gold longer-term. We expect dips to still be viewed as buying opportunities.”
Gold for August delivery fell 30 cents to $1,528.90 an ounce by 8:04 a.m. on the Comex in New York. Immediate-delivery gold was 0.2 percent lower at $1,527.85 in London.
Bullion fell to $1,524.70 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,529.25 at the afternoon fixing on June 10.
European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over investors’ role in the second Greek rescue in 14 months. Unless a deal can be struck to guarantee Greece’s financing needs for the next 12 months, the International Monetary Fund has threatened to withhold its share of what remains of Greece’s original 110 billion-euro ($158 billion) bailout.
‘Catastrophe’ Warning
Euro-area finance ministers have called a special meeting tomorrow as they try to avoid what European Economic and Monetary Affairs Commissioner Olli Rehn called a “Lehman Brothers catastrophe on European soil.”
Gold is up 7.6 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades in London. Europe’s debt crisis helped bullion futures reach a record $1,577.40 on May 2. Prices fell for the first week in five last week.
“Momentum has certainly taken a step back in the wake of gold’s failure to overcome $1,550 last week,” Edel Tully, a London-based analyst at UBS AG, said today in a report. Still, sales to India on June 10 were above average as “opportunistic physical buying emerged.”
Silver for July delivery fell 1.8 percent to $35.69 an ounce in New York. Palladium for September delivery dropped 1.4 percent to $805.45 an ounce. Platinum for July delivery was down 0.9 percent at $1,816.50 an ounce.