Gold at 2-Month Low; Palladium Falls From 13-Year High
New York (Sept 2) Gold fell to the lowest in more than two months in New York as a stronger dollar curbed demand for a protection of wealth. Palladium retreated from a 13-year high.
The dollar reached a seven-month high against 10 major currencies before data today that economists say will show U.S. manufacturing held last month near the highest since April 2011. The greenback has strengthened amid prospects for an improving economy that supports the case for the Federal Reserve to raise interest rates.
Gold slid 28 percent last year on expectations that U.S. stimulus would slow. Prices rose 5.8 percent this year, partly amid geopolitical tension. The intensified conflict in Ukraine has raised the likelihood that Russia will face wider European Union sanctions. Russia is the biggest supplier of palladium, which has climbed to the highest price since February 2001.
“Gold has suffered with the stronger dollar,” David Govett, head of precious metals at Marex Spectron Group in London, said in a note today. Reports are due today, “which are expected to show that the U.S. economy is continuing to prosper and this in turn may pressure gold.”
Gold for December delivery dropped 1.1 percent to $1,272.80 an ounce by 7:38 a.m. on the Comex in New York. It reached $1,268.50, the lowest since June 18. Bullion for immediate delivery declined 1.1 percent to $1,271.88 in London, according to Bloomberg generic pricing.
Floor trading in New York was shut for the Labor Day holiday yesterday and transactions will be booked for settlement purposes today. Futures trading volume was double the average for the past 100 days for this time of day, data compiled by Bloomberg show.
Ukraine Conflict
Ukraine warned of an escalating conflict in its easternmost regions as U.S. President Barack Obama headed to eastern Europe to reassure NATO members. German Chancellor Angela Merkel said Europeans won’t accept Russia’s military incursion into Ukraine.
Silver for December delivery slipped 1.2 percent to $19.25 an ounce in New York. Platinum for October delivery dropped 0.6 percent to $1,416.30 an ounce. Palladium for December delivery slid 2.8 percent to $884 an ounce, after reaching $913 in electronic trading yesterday.
Prices climbed 23 percent this year as increased usage in catalytic converters and a five-month mine strike that ended in June in South Africa, the second-biggest producer, added to supply shortages. Russia has retaliated against previous sanctions by banning imports of some food products, and there have been no metal-related restrictions yet.
Source: Bloomberg
