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Gold declines on slowing investment demand
Gold fell for a second day in London on signs investment demand that helped send prices to an 11-month high last week is slowing.
Investors “may be waiting for better levels to get in,” said John Reade, an analyst in London at UBS AG. “I heard from a German counterparty of some light physical selling from investors who have held gold for decades rather than weeks.”
Gold for immediate delivery fell US$4.8, or 0.5 percent, to $986.95 an ounce by 10:01 a.m. in London. The price on February 20 rose to $1,006.29, the highest since March 18.
Investors who bought gold may not want to hold the metal for as long as buyers in the past, Reade said. “We have not tested the resoluteness of recent ETF purchases,” he said.
Prices have climbed as investors sought a haven from declines in stock markets.
LGT Bank in Liechtenstein (Singapore) Ltd., which is owned by Liechtenstein’s royal family and offers services to wealthy individuals, is favoring gold and shunning Treasuries on bets the risk of inflation will quicken.
US government and Federal Reserve efforts to end the recession in the world’s biggest economy will push up prices for goods and services, said Hans Goetti, who oversees $10 billion in Asia as LGT’s chief investment officer.
“We are setting ourselves up for inflation maybe 12 to 18 months from now,” Goetti said.
In Vietnam the precious metal remained in an upward trend, advancing to a fresh all-time high.
Prices at Saigon Jewelry Joint Stock Co., Vietnam’s biggest gold trader, advanced VND50,000 to VND19.9 million a tael, or $948.65 per ounce.
ThanhNien, Bloomberg
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