London - Gold fell for a second day to a two-week low before US retail sales data that may strengthen the case for higher borrowing costs. Silver and palladium declined.
The Bloomberg Dollar Spot Index was little changed after reaching a three-week high on Monday, before data on Tuesday that’s forecast to show US retail sales advanced last month. Rising rates curb gold’s appeal because the metal generally only offers returns through price gains, prompting investors to favour assets with better yield prospects such as equities and bonds.
“Gold’s momentum in the short term appears to be to the downside,” Jonathan Butler, a precious metals strategist at Mitsubishi Corporation, said by phone from London. “A firmer dollar is keeping gold and precious metals under pressure. When the US will start to raise rates is still the story.”
Gold for immediate delivery fell 0.6 percent to $1,191.47 an ounce by 9.45am in London, according to Bloomberg generic pricing. It reached $1,190.18, the lowest since April 1. Bullion for June delivery lost 0.7 percent to $1,191 on the Comex in New York.
Minutes released last week of the Federal Reserve’s March meeting showed officials were split on rate increases, with a minority arguing for raising rates as early as June, while others pushed for later this year and a couple favoured holding them near zero until 2016.
Silver for immediate delivery declined as much as 1.1 percent to $16.1085 an ounce, the lowest since March 20, and was last at $16.1542. Palladium slipped 1.8 percent to $757.50 an ounce, while platinum lost 0.5 percent to $1,148.50 an ounce.
Bloomberg