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Gold declines as stronger dollar, weaker crude oil curb demand
Gold fell to a one-month low in London as a stronger dollar and lower crude oil diminished the metal’s attraction as a hedge against a weaker US currency and faster inflation.
The Dollar Index, which measures the currency against six counterparts, rose as much as 0.7 percent as the World Bank said the global recession will be deeper than it predicted in March, fanning demand for the greenback as a refuge. Crude oil fell for a second day, sliding as much as 2.4 percent to US$67.89 a barrel.
“The dollar is stronger, and that is weighing on the metals,” said Alexander Zumpfe, a precious-metals trader at Hanau, Germany-based Heraeus Metallhandels GmbH. Oil below $70 a barrel reduced demand for bullion as a hedge, he said.
Gold for immediate delivery fell $8.95, or 1 percent, to $925.10 an ounce at 10:51 a.m. local time. The metal dropped as low as $922.04, the lowest intraday price since May 19. Futures for August delivery slid $10.90, or 1.2 percent, to $925.3 on the New York Mercantile Exchange’s Comex division.
“There is no new money flowing in,” Zumpfe said. “Physical investors are not buying at current levels. Prices are stabilizing.”
Bullion dropped to $924 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $935.25 at the afternoon fixing on June 19.
In Vietnam, the precious metal was traded at VND20.92 million per tael, or $979.4 an ounce, according to the country’s biggest gold trader Saigon Jewelry Joint Stock Co.
Vietnam’s gold price was $54 per ounce higher than the international price.
thanhnien, Bloomberg
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