New York - Gold futures declined for the fourth time in five sessions as a stronger dollar reduced the appeal of the precious metal as an alternative investment.
The dollar, up 3.6 percent this year against a basket of six currencies, gained today for the first time in four sessions. Holdings in the SPDR Gold Trust, the biggest exchange- traded-product backed by bullion, fell 0.9 metric ton to 1,205.31 tons on April 5, the lowest since June 2011.
“The strength in the dollar is working against gold,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview.
Gold futures for June delivery slipped 0.3 percent to $1,571.20 an ounce at 11:12 a.m. on the Comex in New York. Prices dropped 1.2 percent last week, and were down 6 percent this year through April 5.
Futures trading volumes were 36 percent lower than the 100- day average for the time of day, according to data compiled by Bloomberg.
“ETP outflows remain the largest downside risk to gold prices,” Barclays Plc analysts including Suki Cooper wrote in a report today. “Should outflows persist at this pace, they would match the weakest month on record, which was set in February.”
Gold jumped 1.5 percent on April 5 after US payrolls in March were lower than economists’ expectations, bolstering the case for prolonged central-bank stimulus.
Silver futures for May delivery dropped 0.2 percent to $27.155 an ounce in New York.
Hedge funds are holding a net-short position of 2,982 contracts, the first bet on a decline since the data begins in 2006, US Commodity Futures Trading Commission figures show. - Bloomberg News