Gold may fall as lower oil prices curb hedge demand
Gold, little changed below US$1,000 an ounce in London Friday, may fall as lower oil prices curb demand for the metal as a hedge against accelerating consumer prices.
Crude-oil futures dropped as much as 1.8 percent in New York on concern that the U.S. economic recovery may stall, limiting fuel demand in the world’s biggest economy. Gold is set for a sixth weekly gain in seven as oil has climbed more than 5 percent this week.
“Lower oil prices usually signal less inflationary pressures,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said Friday by phone. “That is a bit negative for gold.”
Immediate-delivery bullion lost US$1.42, or 0.1 percent, to US$997.78 an ounce by 11:58 a.m. local time. The commodity is up 0.7 percent this week. December gold futures were 0.2 percent lower at US$998.50 an ounce on the New York Mercantile Exchange’s Comex division.
The metal slipped to US$998 in the morning “fixing” in London, used by some mining companies to sell production, from US$1,004.75 at Thursday’s afternoon fixing. Spot prices have fallen 2.6 percent since climbing to an 18-month high of US$1,024.28 on Sept. 17.
The dollar rose as much as 0.3 percent to a three-week high against the euro before a U.S. report forecast to show the jobless rate climbed to a 26-year high. Gold typically falls when the currency strengthens.
“The gold market will probably be relatively quiet until the release” of the jobs figures, GoldCore Ltd., a brokerage in Dublin, said Friday in a note. Gold is “still continuing to knock on the door and consolidating near the psychological US$1,000 an ounce mark.”
Among other precious metals for immediate delivery in London, silver fell 0.6 percent to US$16.255 an ounce. Platinum was 0.6 percent lower at US$1,271.75 an ounce, while palladium was unchanged at US$291.50 an ounce.
