Gold headed for its steepest weekly decline in more than a quarter-century in London as the rising dollar curbed investor demand for the precious metal.
Bullion has declined 13 percent in the past week, the biggest drop since the week ended March 14, 1980, as the dollar rose to a 23-month high against the euro and a 5 1/2-year high against the pound. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, has stalled after reaching a record 770.6 tons on Oct. 10. Holdings fell to 747.1 metric tons yesterday.
``Any financial market movements are being interpreted as bearish for precious metals,'' Walter de Wet, an analyst a Standard Bank Ltd. in Johannesburg, wrote in a note today. ``The worst culprit is the greenback.''
Gold for immediate delivery fell $34, or 4.7 percent, to $687.45 an ounce as of 10:05 a.m. in London. Gold futures for December dropped $26.60, or 3.7 percent, to $688.10 in electronic trading on the Comex division of the New York Mercantile Exchange.
``The decline in the gold price is not only linked to a further strengthening in the U.S. dollar but also evidence that physical buying of gold via ETFs is beginning to fade,'' Deutsche Bank AG analysts led by Michael Lewis wrote in a report today. ``We estimate fair value for gold to be $600-$620 an ounce.''>>>MORE
As we posted on September 19:...This is the tenth or twelfth remix of Der Untergang (The Downfall) that I've seen, and the funniest.