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Gold may further decline

28 September 2009 15:30 (UTC +04:00)

Baku-APA-Economics. Gold, little changed in London today, may decline for a fourth day as a stronger dollar curbs demand for the precious metal as an alternative investment.
The U.S. Dollar Index, a six-currency gauge of the greenbackâ€™s strength, climbed as much as 0.6 percent before a German report forecast to show consumer prices dropped for the first time in four months. Gold tends to weaken when the dollar strengthens.
Immediate-delivery bullion added 41 cents to $991.41 an ounce by 11:35 a.m. local time, rebounding from a drop of as much as 0.5 percent. The metal lost 1.7 percent last week, its first drop in six weeks. December gold futures rose 0.1 percent to $992.30 on the New York Mercantile Exchangeâ€™s Comex division.
The metal slipped to $990.50 an ounce in the morning â€œfixingâ€ in London, used by some mining companies to sell production, from $991.50 at the afternoon fixing on Sept. 25.
The dollar index has fallen 5.4 percent this year and slid to the lowest level in a year on Sept. 23. Bullion is up 12 percent and climbed to an 18-month high of $1,024.28 an ounce on Sept. 17. It reached a record $1,032.70 in March 2008.
Hedge-fund managers and other large speculators increased their bets on rising New York futures to a record in the week ended Sept. 22, the U.S. Commodity Futures Trading Commission said last week. Net-long positions gained by 1,102 contracts to 236,749 contracts.
Among other precious metals for immediate delivery, silver lost 0.5 percent to $15.965 an ounce, the lowest in three weeks. Palladium was 0.5 percent lower at a three-week low of $290.50 an ounce, while platinum added 0.3 percent to $1,278.50 an ounce. Source: Bloomberg