Gold Drops From Three-Month High as Stronger Dollar Cuts Demand
(Bloomberg) - Gold dropped from a three-month high as a stronger dollar curbed demand for the metal as a protection of wealth. Silver slipped from the highest since January.
The euro declined against the dollar after a European Central Bank official said the bank will speed up its bond-buying program before an anticipated mid-year lull. The European currency weakened a second day amid speculation Greece’s banking system is weeks away from insolvency. The Bloomberg Dollar Spot Index reached a one-week high.
The ECB’s plan to boost bond buying “proved to be quite negative for gold as the central bank action drove the euro abruptly lower and the dollar higher,” Bart Melek, the Toronto-based head of commodity strategy at TD Securities Inc., said by
e-mail from London.
Bullion climbed 3.5 percent in the past five sessions in the longest run since March. Prices have risen as the standoff between Greece and its lenders continued and U.S. data missed economists’ forecasts, adding to the case for the Federal Reserve to hold off raising interest rates.
Gold for immediate delivery lost 0.2 percent to $1,222.53 an ounce by 12:15 p.m. in London, according to Bloomberg generic pricing. It reached $1,232.44 on Monday, the highest since Feb.
17. Futures for June delivery fell 0.4 percent to $1,222.20 on the Comex in New York. Holdings in gold-backed exchange-traded products declined 5.6 metric tons to 1,607.6 tons, the lowest since mid-January,according to data compiled by Bloomberg as of Monday.