Gold Heads for Longest Losing Streak Since May as Dollar Gains

August 5, 2013 09:45 AM
 

(For more on the gold bear market, see EXT5.)

 

Aug. 5 (Bloomberg) -- Gold futures fell for a fifth straight session, heading for the longest slump since May, as a stronger dollar crimped demand for the precious metal as an alternative investment.

The dollar rose as much as 0.4 percent to $1.33 against the euro. Gold fell 22 percent this year through Aug. 2 as the greenback gained 4.3 percent against a gauge of 10 major trading partners. The metal has also retreated as some investors lost faith in bullion as a store of value amid concern that the Federal Reserve may slow the pace of its stimulus.

"The dollar’s strength against the euro is pushing gold lower," David Lee, a vice president at Heraeus Precious Metals Management in New York, said in a telephone interview. "Some investors are on the sidelines as they want some clarity from the Fed."

Gold futures for delivery in December declined 0.8 percent to $1,300.50 an ounce at 11:32 a.m. on the Comex in New York. Prices fell 1.4 percent in the previous four sessions.

Trading was 46 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

The Fed said last week it would maintain its $85 billion monthly bond-buying program while warning that persistently low inflation could hamper the economic expansion. Fifty percent of the 54 economists in a Bloomberg survey last month expected the Fed to decide to pare bond purchases in September.

Money managers cut their net-long gold position by 6.5 percent to 65,517 Comex futures and options by July 30, U.S. Commodity Futures Trading Commission data show.

Silver futures for September delivery dropped 1.3 percent to $19.655 an ounce in New York.

 

--With assistance from Whitney McFerron in London and Glenys Sim in Singapore. Editors: Millie Munshi, Thomas Galatola

 

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

 

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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