Gold, Little Changed, May Fall on Dollar, Inflation Outlook
LONDON (July 4) Gold, little changed in London today, may decline on speculation slower inflation and a stronger dollar will curb the metal’s appeal as an alternative investment.
The U.S. Dollar Index, a six-currency measure of the greenback’s value, gained as much as 0.4 percent today after a report yesterday showed U.S. employers cut more jobs than forecast in June and the jobless rate rose to the highest in almost 26 years. Bullion and the dollar usually move inversely.
“Gold has been pricing in a very high fear of inflation, and with the U.S. unemployment data, the market should move toward a view that there’ll be no inflation for the next few years,” said Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London. “Crude oil has gone down, and the dollar could go higher.”
Bullion for immediate delivery added $2.22, or 0.2 percent, to $932.02 an ounce at 9:49 a.m. in London. August gold futures gained 0.1 percent to $932 an ounce on the New York Mercantile Exchange’s Comex division. Most U.S. markets are closed today for the Independence Day holiday.
Yesterday’s jobs figures triggered the biggest drop in 10 days in the MCSI World Index of shares. Bullion, heading for a fourth weekly decline in five, has slipped 0.8 percent this week as the dollar index has added 0.6 percent and crude-oil futures have slid 3.9 percent. Some investors use oil prices as an inflation guide.
SPDR Holdings
“For almost two weeks, gold hasn’t been able to break and hold below” $925 to $926 an ounce and “hasn’t also been able to break higher above $943-$947,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said in a note today. “Today is most likely to be dull with U.S. markets closed.”
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged for a second day at 1,120.55 metric tons yesterday, the company’s Web site showed.
Silver for immediate delivery in London gained 0.1 percent to $13.4125 an ounce. Platinum was almost unchanged at $1,186.75 an ounce, and palladium was 0.5 percent lower at $250.75 an ounce.
