London - Gold fell for a second day in London on speculation some investors will sell the metal after its rally to a two-month high. Silver declined.
Bullion reached $1,384.55 an ounce yesterday, the highest since June 18. The Bloomberg US Dollar Index, which tracks the greenback against 10 major currencies, was little changed as investors await Federal Reserve’s Federal Open Market Committee meeting minutes due tomorrow for clues on when it will reduce stimulus.
Gold fell 19 percent this year as some investors lost faith in the metal as a store of value. The Fed will probably begin to reduce the $85-billion of monthly debt buying in September, according to 65 percent of economists surveyed by Bloomberg from August 9-13. Bullion rebounded 15 percent from a 34-month low set June 28 as lower prices spurred more physical purchases.
“It feels as though the market has run out of ideas for the time being after the rally,” David Govett, head of precious metals at Marex Spectron Group in London, said today in an email. “We will have to wait for the FOMC minutes on Wednesday evening for fresh impetus.”
Gold for immediate delivery fell 0.5 percent to $1,359.80 an ounce by 8.57am in London. Bullion for December delivery was down 0.5 percent at $1,358.40 on the Comex in New York. Futures trading volume was 13 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Gold exchange-traded product holdings fell 2.8 metric tons to 1,947.7 tons yesterday, data compiled by Bloomberg show. Assets, which last week increased for the first time since February, are down 26 percent this year.
Silver for immediate delivery slid 2.2 percent to $22.6654 an ounce, after yesterday reaching a three-month high of $23.6227. The metal’s 14-day relative-strength index was above the level of 70 for a third day yesterday, indicating to some investors who study technical charts that a decline may be imminent.
“Silver was still looking overbought,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based precious metals trader and refiner. “We expect silver to consolidate in the near term.”
Palladium slipped 0.8 percent to $745.80 an ounce. Platinum declined 0.3 percent to $1,503.68 an ounce. - Bloomberg