Gold: longest losing streak since August

Gold: longest losing streak since August
Gold headed for its fourth weekly decline, the longest losing streak since August, as a global stock rally eroded demand for the metal as a store of value.

By Bloomberg staff
Last Updated: 4:19PM BST 17 Apr 2009

Gold eased as Asian stocks advanced on growing confidence the global recession is easing. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, dropped to 1,119.43 metric tons after holding at a record high of 1,127.68 tons the previous four days.

“Further strength in equity markets would signal an increasing risk appetite, which would be detrimental to precious metals, which have relied on safe-haven demand for support as the majority of commodity prices collapsed under the weight of rapid and severe economic deterioration,” said Toby Hassall, an analyst at Commodity Warrants Australia Pty.

Bullion for immediate delivery fell for a second day by as much as 0.4pc to $872.63 an ounce. It traded at $873.30 in Singapore, down 1pc for the week. Gold has fallen 4.6pc in the past month while the benchmark MSCI Asia Pacific Index soared 18pc.

US stocks rose after the government said fewer Americans filed claims for jobless benefits last week, and as JPMorgan Chase & Co posted better-than-expected earnings yesterday. A day earlier, US consumer prices posted their first annual decline since 1955, alleviating concern that Federal Reserve actions will cause inflation to soar.

“Over the longer term however, unprecedented fiscal and monetary stimuli have increased inflationary expectations, which will be constructive to gold prices,” said Hassall.

Among other precious metals for immediate delivery, silver was down 0.5pc at $12.18 an ounce, platinum gained 0.4pc to $1,211.50 an ounce, and palladium climbed 0.4pc to $234.50 an ounce.

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/5172424/Gold-longest-losing-streak-since-August.html

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