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Gold Little Changed Asia as Record Spurred Sales; Oil Declines
By Feiwen Rong
Feb. 22 (Bloomberg) -- Gold was little changed in Asia after a rally to a record yesterday spurred selling from investors speculating that gains were overdone. Crude oil also declined, reducing demand for the precious metal.
Gold usually moves in tandem with oil as investors tend to buy bullion to hedge against inflation when energy prices are rising. Oil fell to $98.06 a barrel at 9:27 a.m. Singapore time in after-hours trading on the New York Mercantile Exchange, 3.2 percent down from record $101.32 on Feb. 20.
``Gold's decline from its high is a result of profit-taking and that oil is under pressure,'' Jonathan Barratt, managing director of Commodity Broking Services, said by phone from Sydney today. ``The rally in gold prices was purely driven by inflation, a rise in platinum and hot money coming into commodities.''
Gold for immediate delivery fell as much as $4.80, or 0.5 percent, to $941.30 an ounce today and traded at $944.91 at 10:40 a.m. Singapore time, 1.3 percent lower than the record $953.91 yesterday. Silver gained 2 cents to $17.90 an ounce at the same, after gaining yesterday to $18.06, a 27-year high.
Gold for April delivery fell as much as $5.5, or 0.6 percent, to $943.70 an ounce and traded at $947.50 as of 10:43 a.m. Singapore time in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Physical Demand
``If crude prices continue to come off I think you will find gold will come off in the immediate short-term,'' Barratt said.
Gold is also under pressure because of lack of physical demand at current prices. There are indications showing that Indian gold consumption in January ``has dribbled to as low as 5 or 8 tons compared with a previous 50 or 60 tons,'' Barratt said.
Gold demand dropped 17 percent in the fourth quarter as high prices deterred buyers, the producer-funded World Gold Council said in a statement on Feb. 13. Purchases in India declined 64 percent. Jewelry use dropped 17 percent.
``It's been an unbelievable drop'' in the gold demand from the world's largest buyer, he said. ``We are seeing a resurgence in scrap offering because this is the price where you will find increased recycling.''
Gold for December delivery on The Tokyo Commodity Exchange fell 16 yen, or 0.5 percent, to 3,284 yen a gram ($951 an ounce) as of the 11 a.m. local time break.
Gold for June delivery on the Shanghai Futures Exchange fell by 0.4 percent to 222.60 yuan a gram ($969 an ounce).
To contact the reporter for this story: FeiweGold Little Changed Asia as Record Spurred Sales; Oil Declines
By Feiwen Rong
Feb. 22 (Bloomberg) -- Gold was little changed in Asia after a rally to a record yesterday spurred selling from investors speculating that gains were overdone. Crude oil also declined, reducing demand for the precious metal.
Gold usually moves in tandem with oil as investors tend to buy bullion to hedge against inflation when energy prices are rising. Oil fell to $98.06 a barrel at 9:27 a.m. Singapore time in after-hours trading on the New York Mercantile Exchange, 3.2 percent down from record $101.32 on Feb. 20.
``Gold's decline from its high is a result of profit-taking and that oil is under pressure,'' Jonathan Barratt, managing director of Commodity Broking Services, said by phone from Sydney today. ``The rally in gold prices was purely driven by inflation, a rise in platinum and hot money coming into commodities.''
Gold for immediate delivery fell as much as $4.80, or 0.5 percent, to $941.30 an ounce today and traded at $944.91 at 10:40 a.m. Singapore time, 1.3 percent lower than the record $953.91 yesterday. Silver gained 2 cents to $17.90 an ounce at the same, after gaining yesterday to $18.06, a 27-year high.
Gold for April delivery fell as much as $5.5, or 0.6 percent, to $943.70 an ounce and traded at $947.50 as of 10:43 a.m. Singapore time in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Physical Demand
``If crude prices continue to come off I think you will find gold will come off in the immediate short-term,'' Barratt said.
Gold is also under pressure because of lack of physical demand at current prices. There are indications showing that Indian gold consumption in January ``has dribbled to as low as 5 or 8 tons compared with a previous 50 or 60 tons,'' Barratt said.
Gold demand dropped 17 percent in the fourth quarter as high prices deterred buyers, the producer-funded World Gold Council said in a statement on Feb. 13. Purchases in India declined 64 percent. Jewelry use dropped 17 percent.
``It's been an unbelievable drop'' in the gold demand from the world's largest buyer, he said. ``We are seeing a resurgence in scrap offering because this is the price where you will find increased recycling.''
Gold for December delivery on The Tokyo Commodity Exchange fell 16 yen, or 0.5 percent, to 3,284 yen a gram ($951 an ounce) as of the 11 a.m. local time break.
Gold for June delivery on the Shanghai Futures Exchange fell by 0.4 percent to 222.60 yuan a gram ($969 an ounce).
To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net ;
n Rong in Singapore at frong2@bloomberg.net ;