Gold’s Rally Losing Steam as Stocks Climb and Dollar Strengthens

London (Aug 12)  Gold extended declines after gains in benchmark share indexes to records in the U.S. added to bets that the Federal Reserve will raise interest rates as early as this year.

Bullion for immediate delivery fell 0.2 percent to $1,336.79 an ounce by 10:08 a.m. in London, according to Bloomberg generic pricing.

That added to a 0.6 percent drop Thursday as the S&P 500 Index, the Dow Jones Industrial Average and the Nasdaq Composite Index all rose to records, the first time that’s happened since 1999.

"There’s definitely a bit of summer exuberance going on in the equity markets and that’s possibly reducing the appeal of safe havens like gold," said Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London. "The dollar has also advanced somewhat.”

The currency climbed for a second day as futures signaled odds of a Fed rate hike this year increased to 49 percent Thursday from 41 percent the day before. A stronger dollar tends to curb demand for gold by making it more expensive in other currencies.

In other news and metals:
•Holdings in gold-backed exchange-traded funds added 0.9 metric ton to 2,039.9 tons on Thursday, data compiled by Bloomberg show.

•Silver fell 0.7 percent, while platinum advanced 0.4 percent and palladium rose 0.2
 percent.

Source:  Bloomberg