Gold Declines for a Third Day in London as Dollar Spurs Selling
By Rachel Graham
July 7 (Bloomberg) -- Gold fell for a third day in London as a rising dollar reduced the metal's appeal as an alternative investment to the U.S. currency. Platinum and silver dropped.
The relationship between gold and the dollar-euro exchange rate is strengthening, with a correlation of 0.69 so far this year compared with 0.45 in the same period last year, Bloomberg data show. A figure of 1 would mean the two moved in lockstep.
``The metal has traded lower in line with the euro this morning,'' James Moore, an analyst at TheBullionDesk.com, wrote today in a report.
The metal for immediate delivery fell $13.10, or 1.4 percent, to $920.15 an ounce as of 9:15 a.m. in London. Futures for August delivery dropped $12.10, or 1.3 percent, to $921.50 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Platinum, used in car catalysts, traded as low as $1,977.50 an ounce in London, its weakest in more than a month.
``Sentiment should remain subdued ahead of the release of the Eurozone investor confidence statistics -- a weak number should further fuel industrial demand growth fears,'' Standard Bank analyst Manqoba Madinane wrote in a report today.
Among other metals for immediate delivery, silver dropped 22.5 cents, or 1.2 percent, to $17.87 an ounce and palladium fell $5.25, or 1.2 percent, to $450.50 an ounce.
To contact the reporter on this story: Rachel Graham in London at rgraham13@bloomberg.net
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