Gold Drops in London as Strengthening Dollar Curbs Demand
London (May 23) Gold declined as a strengthening dollar curbed demand for a haven.
The dollar climbed for a fourth consecutive day before a U.S. report that may indicate an increase in new home sales. Gold has gained 7.5 percent this year as U.S. economic concerns and rising tension in Ukraine spurred haven demand.
“The dollar has a huge influence,” said Bernard Sin, head of currency and metal trading at MKS (Switzerland) SA in Geneva, who has been in the business for 25 years. “Ukraine, Thailand, China, Vietnam. These are all considering factors.’
Gold for immediate delivery fell 0.1 percent to $1,292.39 an ounce by 11:49 a.m. in London. Futures for August delivery declined 0.2 percent to $1,292.30 an ounce on Comex in New York.
The U.K. Financial Conduct Authority fined Barclays 26 million pounds ($44 million) for gold-fixing failings, and banned former trader Daniel Plunkett from the industry.
‘‘We may see fewer participants being involved in the fixing because of this,’’ Sin said. ‘‘It shouldn’t move the market. It’s not as if they have to go out and cover a long or short position.”
The U.S. Commerce Department will say today sales of new homes rose 10.7 percent to a 425,000 annualized pace in April from the previous month, when they fell 14.5 percent, according to analysts surveyed by Bloomberg.
Palladium fell 0.3 percent to $834.10 an ounce, platinum dropped 0.6 percent to $1,481.88 an ounce and silver declined 0.3 percent to $19.4575 an ounce.
