Finance

Finance

Gold price drop as equities gain

09 February 2009 11:02 (UTC +04:00)

Bakuâ€“ APA-Economics. Gold fell for a second day in Asia as some investors sold the metal to lock in profits after its rally to near a four-month high last week, Bloomberg reports.
Bullion also declined as equities gained on expectations a surge in unemployment will push the U.S. to expedite recovery plans, eroding demand for alternative investments.
Bullion for immediate delivery dropped as much as 0.9 percent to $903.34 an ounce, and traded at $905.20 at 11 a.m. in Singapore. The metal climbed to $924.59 an ounce on Feb. 5. Prices reached $929.70 on Jan. 30, the highest since Oct. 10.
Gold for February delivery fell 0.9 percent at $906.30 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. Bullion on the Tokyo Commodity Exchange was 0.5 percent lower at 2,675 yen a gram ($908 an ounce).
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Feb. 3, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 155,306 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said Feb. 6 in its Commitments of Traders report. Net-long positions rose by 14,192 contracts, or 10 percent, from a week earlier.
Still, gold may rebound this week on speculation that government spending to revive the U.S. economy will spark inflation, boosting the metalâ€™s appeal as a hedge against accelerating prices.
Twenty of 27 traders, investors and analysts surveyed from Tokyo to Chicago on Feb. 5 and Feb. 6 advised buying gold, which fell 1.5 percent last week to $914.30 an ounce in New York. Five survey respondents said to sell, and two were neutral.
Among other precious metals for immediate delivery, silver fell 0.7 percent to $13.03 an ounce, platinum lost 1.5 percent to $987.25 an ounce, and palladium fell 0.7 percent to $211 an ounce as of 11:08 a.m. Singapore time.