Gold fell, capping the longest slump
since October 2009, and silver tumbled to a three-month low as
Europe’s deepening debt crisis drove commodities and stocks
lower.
 |
| Gold bars are arranged for a photograph at Bullion Trading LLC in New York. Photographer: Paul Taggart/Bloomberg |
The euro dropped to an 11-month low against the dollar as
lending to financial institutions sent the European Central
Bank’s balance sheet to a record high. The Standard & Poor’s
GSCI index of 24 raw materials and the MSCI World Index of
equities were poised for the biggest declines in two weeks.
Platinum approached the lowest since November 2009, and
palladium dropped almost 3 percent.
The ECB said lending to euro-area banks jumped 214 billion
euros ($276.9 billion) to 879 billion in the week ended Dec. 23,
bolstering credit to the economy during the fiscal turmoil. Gold
has slumped 19 percent from a record $1,923.70 an ounce on Sept.
6, partly on sales to cover losses in other markets. About $10
trillion has been erased from global equities (MXWD) since May.
“What’s going on in Europe is very worrying,” James Dailey, who manages $215 million at TEAM Financial Management
LLC in Harrisburg, Pennsylvania, said in an e-mail. “The
dollar’s strength is working against all commodities, including
gold.”
Gold futures for February delivery declined 2 percent to
settle at $1,564.10 at 1:47 p.m. on the Comex in New York. The
price dropped for the fifth straight session, the longest slide
since October 2009. The commodity headed for the first quarterly
slump since September 2008.
Silver futures for March delivery fell 5.2 percent to
$27.234 an ounce on the Comex. Earlier, the price touched
$27.10, the lowest since Sept. 26. The metal has plummeted 45
percent from a 31-year high of $49.845 on April 25.
India, China
Gold imports by India, the biggest consumer, may drop as
much as 50 percent this month after the rupee plunged, according
to the Bombay Bullion Association. China restricted gold trading
in spot and futures contracts to the Shanghai Gold Exchange and
the Shanghai Futures Exchange to crack down on illegal buying
and selling of commodities.
“Concerns were raised over the sustainability of demand
out of China and India,” Marc Ground, an analyst at Standard
Bank Plc, said in a report.
Platinum futures for April delivery declined 3.2 percent to
$1,392.40 an ounce on the New York Mercantile Exchange. Earlier,
the price touched $1,388.60. On Dec. 15, the metal declined to
$1,376, the lowest since Nov. 13, 2009.
‘No Surprise’
Palladium futures for March delivery slumped 2.9 percent to
$647.15 an ounce on Nymex, the biggest drop since Dec. 14.
This year, gold has advanced 10 percent, heading for the
11th straight annual gain, on demand for an alternative
investment amid slumping equities.
“Gold has been one of the best performers this year, so it
comes as no surprise that we are seeing some end-of-year profit-
taking,” said Ronald Stoeferle, a commodity analyst at Erste
Group Bank AG in Vienna.
Before today, the MSCI equity index dropped 7.5 percent
this year.
To contact the reporters on this story:
Debarati Roy in New York at
droy5@bloomberg.net;
Maria Kolesnikova in London at
mkolesnikova@bloomberg.net
To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net
