|
| Low inflation to keep gold prices under check |
| Bloomberg / Oct 03, 2009, 00:16 IST |
|
Gold, little changed below $1,000 an ounce in London on Friday, may fall as lower oil prices curb demand for the metal as a hedge against accelerating consumer prices.
Crude-oil futures dropped as much as 1.7 per cent in New York on concern that the US economic recovery may stall, limiting fuel demand in the world’s biggest economy. Gold is set for a sixth weekly gain in seven as oil has climbed 5.9 per cent this week.
“Lower oil prices usually signal less inflationary pressures,” Peter Fertig, the owner of Quantitative Commodity Research Ltd in Hainburg, Germany, said on phone. “That is a bit negative for gold.”
Immediate-delivery bullion lost 80 cents, or 0.1 per cent, to $998.40 an ounce by 10.31 am local time. The commodity is up 0.7 per cent this week. December gold futures were 0.1 per cent lower at $999.30 an ounce on the New York Mercantile Exchange’s Comex division.The dollar rose as much as 0.3 per cent to a three-week high against the euro before a US report forecast to show the jobless rate climbed to a 26-year high. Gold typically falls when the currency strengthens.
The dollar also earlier rallied after European Central Bank President Jean-Claude Trichet said, ahead of a Group of Seven meeting in Istanbul tomorrow, that “disorderly” exchange rate movements have “adverse implications” for economies.
“If the foreign exchange markets believe that the G-7 meeting is likely to address euro strength, gold may come under further selling pressure,” HSBC Securities analyst James Steel wrote in a note.
Eleven of 24 traders, investors and analysts surveyed by Bloomberg, or 46 per cent, said bullion will rise next week. Nine forecast lower prices and four were neutral.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
