By Halia Pavliva and Nicholas Larkin
June 19 (Bloomberg) — Gold rose in New York as the dollar weakened, boosting demand for precious metals as alternative investments.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell as much as 0.8 percent. Gold, which typically moves inversely to the U.S. currency, has risen 5.9 percent this year as the dollar index fell 1.3 percent.
“Gold is following the moves up and down in the U.S. dollar,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by telephone. “That’s currently the major driver.”
Gold futures for August delivery gained $1.60, or 0.2 percent, to $936.20 an ounce on the New York Mercantile Exchange’s Comex division. The metal fell 0.5 percent this week, the third consecutive drop and the longest span of weekly declines since mid-April.
Bullion for immediate delivery rose $1.84, or 0.2 percent, to $934.90 at 8:24 p.m. in London.
“The gold market has been in a tight, $13 trading range for the past five trading days and appears technically anemic,” said Ralph Preston, a Heritage West Futures Inc. commodity analyst in San Diego. “With this week’s consumer-price index and producer-price index reports indicating a subdued inflation rate, a dip below $927 an ounce hints at a drop back down to $900 an ounce support level in the coming week.”
Gold ‘Fixing’
Gold rose to $935.25 in the afternoon “fixing” in London, used by some mining companies to sell their output, from $933.75 in the morning fixing. Before today, the spot price in London slid 9.6 percent from a record $1,032.70 in March 2008.
“Our expectations for the dollar to strengthen over the forthcoming weeks are likely to cap gains” in gold, Suki Cooper, a Barclays Capital Plc analyst in London, said today in a note.
“Gold’s attractiveness as a safe-haven asset is virtually zero at the moment,” Andrey Kryuchenkov, a VTB Capital analyst in London, said today in a note. “Inflation expectations are not there just yet and the precious metal could see even more losses if equities bounce back up.”
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, remained at 1,132.15 metric tons, where it stood as of June 5, according to the company’s Web site. That’s the ETF’s longest static period since Nov. 10.
Silver Falls
Silver futures for July delivery in New York fell 4 cents, or 0.3 percent, to $14.20 an ounce in New York. Silver for immediate delivery slipped 0.75 cents to $14.2025 an ounce at 8:21 p.m. in London.
Platinum futures for July delivery rose $3.60, or 0.3 percent, to $1,211.20 an ounce in New York while palladium futures for September delivery climbed $6.45, or 2.7 percent, to $246.15 an ounce.
“Platinum-group metals prices continue to consolidate around their recent lower levels, supported by further inflows into the physically backed ETPs,” Barclay’s Cooper said in the note, referring to exchange-traded products such as ETFs.
Palladium held in ETF Securities Ltd.’s exchange-traded commodities rose 1 percent from June 17 to a record 319,451 ounces yesterday, according to data on the company’s Web site. Silver holdings fell 0.8 percent to 19.87 million ounces today, from 20.02 million on the previous day.
