Gold traded above the lowest price in almost four months in New York as investors weighed an advance in equities that curbed demand and amid muted physical buying.
Gold capped a 3.6 percent drop last week as the S&P 500 Index of stocks closed at an all-time high May 30. Stronger equities and the dollar curbed demand for gold and the metal will probably fall further, Barclays Plc wrote in a report today. Bullion’s decline took it below a technical level that suggests to some that prices may be poised to rebound.
Bullion slipped about 10 percent since reaching a six-month high in mid-March, when Russia’s standoff over Ukraine spurred haven demand. A majority of the Russian forces have been withdrawn from the Ukrainian border, Rear Admiral John Kirby, a Pentagon spokesman, told reporters on May 30. Hedge funds pared bets on a gold rally at the fastest pace this year.
“I suspect the market will remain in the doldrums, with rallies being sold” before the European Central Bank’s policy meeting and U.S. jobs data due this week, David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report. “We have seen very little evidence of physical demand yet.”
Gold for August delivery was little changed at $1,246.70 an ounce by 7:29 a.m. on the Comex in New York. It reached $1,241.10, the lowest since Feb. 3. Futures trading volumes were 29 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Bullion for immediate delivery lost 0.2 percent to $1,246.70 in London, according to Bloomberg generic pricing.
via Bloomberg