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Gold falls to 2-week low as rising dollar, lower oil cut demand
Gold fell to the lowest in almost two weeks in New York and London as the dollar strengthened and oil slid, curbing demand for the metal as an alternative investment and hedge against accelerating consumer prices.
The US Dollar Index, a six-currency measure of the greenback’s value, gained for a third day, climbing as much as 0.6 percent. Gold typically moves inversely to the dollar. Crude oil fell to a five-week low, while European and Asian equities slid on concern that the global economic recovery will falter.
“A stronger greenback has prompted fresh pressure,” James Moore, an analyst at TheBullionDesk.com in London, said in a note Monday. “Due to limited physical interest and tepid investment demand, gold is at risk,” he wrote.
Gold futures for August delivery slid as much as US$10.50, or 1.1 percent, from July 2, to $920.50 an ounce, the lowest since June 23. The contract traded at $922.80 an ounce by 8:30 a.m. on the New York Mercantile Exchange’s Comex division. Most US markets were shut July 3 for the Independence Day holiday. Bullion for immediate delivery in London fell $8.85, or 1 percent, to $923.40.
In Vietnam, gold price of the Saigon Jewelry Holding Co. edged up VND20,000 to VND20.9 million per tael (a tael is equal to 1.2 ounces), or $978.3 an ounce. The company is Vietnam’s biggest gold trader.
Crude oil declined on speculation that a slower economic recovery will hurt demand. Fuel dropped as much as 5 percent to a five-week low of $63.40 a barrel in New York.
Selling side ‘ideal’
“The slide in oil prices may keep prices subdued,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said of bullion in a note Monday. “Fresh buying could be limited and slow. It’s ideal to be on the selling side.”
The MSCI World Index of shares, which today declined to the lowest in almost two weeks, has dropped the past three weeks after climbing to a seventh-month high.
“If equities remain weak through US trading, combined with further dollar strength, then gold could target the recent low at $913-914 an ounce,” John Reade, UBS AG’s head metals strategist in London, said Monday in a note.
thanhnien, bloomberg
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