Gold falls af­ter slow global de­mand

The Pak Banker - - Front Page -


Gold de­clined af­ter a re­port showed that global de­mand slowed in the third quar­ter, and as the dol­lar held near the high­est level in two months, curb­ing in­ter­est in al­ter­na­tive in­vest­ments. Plat­inum slumped the most in a week af­ter a two-month strike in South Africa ended.

Global gold de­mand dropped 11 per­cent to 1,084.6 tons in the third quar­ter from a record a year ear­lier as slow­ing growth in China cut in­vest­ment and jew­elry pur­chases, the World Gold Coun­cil said in a re­port to­day. Pres­i­dent Barack Obama is ne­go­ti­at­ing to reach a deficitre­duc­tion deal with Congress to avert $607 bil­lion in au­to­matic tax in­creases and spend­ing cuts, the so-called fis­cal cliff.

"Risk ap­petite is gen­er­ally sub­dued," said Ole Hansen, the head of com­mod­ity strat­egy at Saxo Bank A/S in Copen­hagen. "The dol­lar in­dex, trad­ing near a two-month high, is cre­at­ing head­winds, while the on­go­ing fis­cal cliff con­cerns sup­port gold."

Gold for im­me­di­ate de­liv­ery fell as much as 0.2 per­cent to $1,722.95 an ounce, and traded at $1,724.82 by 9:44 a.m. in Lon­don. Gold for De­cem­ber de­liv­ery lost 0.3 per­cent to $1,725 an ounce on the Comex.

"China's de­mand is steady, al­though com­pared to a year ago, it is def­i­nitely weaker," said Xiang Nan, an an­a­lyst at CITICS Fu­tures Co., a unit of China's big­gest listed bro­ker­age. China's jew­elry pur­chases slid 5.5 per­cent and bar and coin in­vest­ment de­clined 12 per­cent, leav­ing to­tal con­sumer de­mand at 176.8 tons, the WGC re­port showed.

The dol­lar was lit­tle changed against a six­cur­rency bas­ket in­clud­ing the euro and yen and is up 1.4 per­cent this month. Gold is still 10 per­cent higher this year as stim­u­lus by cen­tral banks around the world boosted de­mand for bullion as a store of value.

Bil­lion­aire in­vestors Ge­orge Soros and Louis Moore Ba­con in­creased their stakes in ex­change-traded prod­ucts backed by gold in the third quar­ter, fil­ings showed yes­ter­day. To­tal as­sets held in ETPs, which reached a record 2,596.106 met­ric tons on Nov. 8, were at 2,595.39 tons yes­ter­day.

Plat­inum for im­me­di­ate de­liv­ery fell 0.8 per­cent to $1,573.75 an ounce and pal­la­dium fell 0.1 per­cent $636.50 an ounce. An­glo Amer­i­can Plat­inum Ltd. (AMS), pro­ducer of about 40 per­cent of global out­put of the metal, said a two-month strike in South Africa ended af­ter it agreed to in­crease pay.

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