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Gold widens loss as dollar gains

30 December 2009 09:59 (UTC +04:00)

Baku-APA-Economics. Gold declined for a second day as a rebounding dollar curbed investor appetite for the precious metal as an alternative asset, Bloomberg reported.
The dollar gained against the euro for a third day before a report economists said will show U.S. manufacturing expanded in December for a fifth month, adding to signs the economy is gaining momentum. Gold has weakened 7.3 percent in December, paring this yearâ€™s advance to 24 percent as the Dollar Index, a six-currency gauge of the dollarâ€™s value, rose 4 percent.
â€œGold prices are mirroring a rebound in the dollar with few in the market willing to trade actively,â€ said Park Jong Beom, a trader with Tongyang Futures Co. in Seoul. â€œGold will resume its feisty rally in the new year as an economic recovery reignites talk of an inflation hedge.â€
Gold for immediate delivery slipped 0.2 percent to $1,094.70 an ounce at 1:31 p.m. in Singapore. Gold for February delivery in New York fell 0.3 percent to $1,095.20 an ounce.
Some investors also sold the metal to book profits after gains this year, analysts said. Gold, which almost quadrupled in this decade, rising from $288 on Dec. 31, 1999, is headed for the first monthly decline since August.
Demand for precious metals has surged as investors sought protection against the prospect of a currency debasement and inflation after the worst recession since World War II prompted governments worldwide to increase money supply and shore up their economic growth.
Among other precious metals, platinum for immediate delivery gained 0.4 percent to $1,470 an ounce, silver slid 0.5 percent to $17.015 an ounce and palladium was up 0.2 percent at $387.63 an ounce.