Gold futures fall, capping a second year of losses
The metal fell today as the dollar gained, reducing the appeal for bullion as an alternative asset. Bullion closed down 1.5 percent for 2014, compared with an average annual move of 12 percent in the past 14 years. Prices touched a four-year low last month as equities rallied and investors speculated that the Federal Reserve is preparing to raise interest rates.
"Gold has had several problems," George Gero, a precious metals strategist at RBC Capital Markets in New York, said in a telephone interview. "The improving U.S. economy, the continued better labor picture, the lack of inflation, very strong stocks and the very strong dollar weighed on gold this year."
Gold futures for February delivery fell 1.4 percent to settle at $1,184.10 an ounce at 1:53 p.m. an ounce on the Comex in New York. The metal rose 1.6 percent yesterday and briefly erased declines for the year.
Investors cut holdings in the biggest exchange-traded product backed by bullion by 11 percent this year, after a 41 percent reduction in 2013. Assets in the SPDR Gold Trust dropped 0.2 percent yesterday to 710.81 metric tons, the lowest since September 2008, data compiled by Bloomberg show.
While Societe Generale SA, Goldman Sachs Group Inc. and Credit Suisse Group AG are among banks seeing further losses, Australia & New Zealand Banking Group Ltd. joined TD Securities Ltd. this month in calling for a rebound in gold prices in 2015. Chinese physical demand may return in 2015 after stockpiles are run down, ANZ said on Dec. 17. Renewed economic concerns in Europe as Greece holds snap elections in early 2015 may also bolster demand for gold as a haven, said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland. "A growing crisis in Greece and weakness in global equities will likely continue, and that will boost gold," Day said by e-mail. "Greece will dominate the dollar as a driver of gold." Silver futures for March delivery fell 4.2 percent to $15.599 an ounce on the Comex, down 19 percent for 2014. The metal has been hurt by concern that slowing global growth will cut industrial usage. Prices dropped 36 percent last year. Platinum futures for April delivery fell 0.8 percent to $1,209.50 an ounce on the New York Mercantile Exchange, capping a 12 percent decline this year.