Gold Declines in New York on Signs of Waning Investor Demand
NEW YORK (Aug 5) Gold fell for a fifth session in New York as investment demand waned for the precious metal as a haven amid speculation about whether the U.S. Federal Reserve will maintain stimulus.
Hedge funds cut bullish positions in gold last week for the first time in five weeks, U.S. Commodity Futures Trading Commission data show. Gold retreated 22 percent this year and is set to halt a 12-year bull run amid speculation the U.S. central bank may scale back stimulus. The U.S. dollar was little changed today against the Bloomberg Dollar Index, a 10-currency gauge, after climbing last week for the first time in four weeks.
“With investor demand for safe-haven assets waning against the backdrop of a strengthening U.S. dollar and rising U.S. bond yields, market conditions for gold and silver have become markedly less favorable,” Adam Longson, an analyst at Morgan Stanley in New York, said in an e-mailed report today.
Gold for delivery in December fell 0.3 percent to $1,306.30 an ounce at 8:04 a.m. on the Comex in New York, erasing an earlier gain of as much as 0.7 percent. In London, gold for immediate delivery dropped 0.4 percent to $1,306.68 an ounce.
The Fed said last week it would maintain its $85 billion monthly bond-buying program while warning that persistently low inflation could hamper the economic expansion. Fifty percent of the 54 economists in a Bloomberg survey last month expected the Fed to decide to pare bond purchases in September.
Bullion may trade between $1,200 and $1,350 an ounce “until the Fed provides further clarity over its asset- purchasing program,” Longson said.
Money managers cut their net-long gold position by 6.5 percent to 65,517 Comex futures and options by July 30, according to the CFTC. Holdings of short contracts, or bets on a decline, rose 6.8 percent, the most in six weeks.
Silver for September delivery dropped 1.2 percent to $19.67 an ounce in New York. Platinum for delivery in October declined 0.5 percent to $1,444 an ounce and palladium for September delivery fell 0.1 percent to $729.05 an ounce.
