Gold de­cline con­tin­ues

The Pak Banker - - MARKETS/SPORTS -

LON­DON: Gold, the pace­set­ter among com­modi­ties this year, is com­ing back to earth. The rally that's made the pre­cious metal the big­gest gainer in 2016 on the Bloomberg Com­mod­ity In­dex fal­tered fur­ther on Mon­day, with spot prices set for the first back-to-back loss in a month as ris­ing share mar­kets and a firmer yuan sapped haven de­mand. Bul­lion for im­me­di­ate de­liv­ery sank as much as 2.1 per­cent to $1,211.62 an ounce, the big­gest in­tra­day loss since Dec. 17, and traded at $1,212.82 at 4 p.m. in Sin­ga­pore, ac­cord­ing to Bloomberg generic pric­ing. The metal, which dropped 0.7 per­cent on Fri­day, had surged to $1,263.48 on Feb. 11, the high­est since Fe­bru­ary 2015.

Gold has been the best per­former among raw ma­te­ri­als this year as a weak­en­ing global econ­omy, the spread of neg­a­tive in­ter­est rates and prospects for a weaker yuan spurred de­mand. On Mon­day, equity mar­kets surged and the Chi­nese cur­rency gained ground af­ter sup­port­ive com­ments from Peo­ple's Bank of China Gov­er­nor Zhou Xiaochuan, strength­en­ing risk ap­petite af­ter a rally in U.S. stocks on Fri­day.

"We've seen a mas­sive re­bound in" U.S. eq­ui­ties on Fri­day, Bernard Aw, a mar­ket strate­gist at IG Asia Pte in Sin­ga­pore, said by phone. "So this ac­tu­ally means some kind of short-term re­ver­sal in risk sen­ti­ment to­ward more risk ap­petite." Min­ers' shares fell. Newcrest Min­ing Ltd., which re­ported a drop in first-half earn­ings on Mon­day, lost 0.6 per­cent in Syd­ney, while Zi­jin Min­ing Group Co. dropped for the first time in more than a week in Hong Kong. Hold­ings in bul­lion-backed ex­change­traded prod­ucts in­creased 0.3 per­cent to 1,592.3 met­ric tons on Fri­day, the high­est since July, ac­cord­ing to data com­piled by Bloomberg. They've ex­panded 8.9 per­cent this year. In other pre­cious me­tals, spot sil­ver lost 3 per­cent to $15.27 an ounce, while plat­inum fell 1.7 per­cent and pal­la­dium re­treated 0.6 per­cent.

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