Gold Declines as Best Week Since August Spurs Investor Sales
Oct. 28 (Bloomberg) -- Gold declined for the first time in six sessions in London as the biggest weekly gain since August spurred some investors to sell the metal. Silver headed for the largest weekly advance since September 2008.
Gold reached a five-week high today after European leaders yesterday agreed on new measures to tackle the region's debt crisis. Federal Reserve policy makers, who meet next week, and the Obama administration are considering additional steps to boost the U.S. economy and cut unemployment.
"Gold's had a good rally, and a small pullback would be healthy for the market," Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva, said today by phone. Still, "people won't give up their safe-haven investments," and that will support prices, he said.
Immediate-delivery gold fell $7.85, or 0.5 percent, to $1,737 an ounce by 11:49 a.m. in London. The metal reached $1,752.82, the highest level since Sept. 23, and is up 5.8 percent this week. Gold for December delivery was 0.5 percent lower at $1,738.40 on the Comex in New York.
The metal rose to $1,735 an ounce in the morning "fixing" in London, used by some mining companies to sell output, from $1,718 at yesterday's afternoon figure.
Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London. Prices reached a record $1,921.15 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 22 percent this year.
1 Trillion Euros
European Union leaders meeting until the early hours of yesterday agreed to boost the region's rescue-fund capacity to 1 trillion euros ($1.4 trillion), crafted a second aid package for Greece, and persuaded holders of Greek bonds to accept a 50 percent writedown on the country's debt.
"The European debt deal should help gold in two ways," Jim Pogoda, an investor in Summit, New Jersey, and a former precious-metals trader for Mitsubishi International Corp., said by e-mail. "For the non-believers, safe-haven buying should keep the market well bid. For those thinking that impediments to growth have been lifted, the further stimulus should be viewed as gold-positive as well."
Silver for immediate delivery rose 0.8 percent to $35.40 an ounce after touching $35.6875, the highest price since Sept. 23. The metal is up 13 percent this week.
Palladium advanced 0.3 percent to $668.25 an ounce. Platinum gained 0.5 percent to $1,645.25 an ounce after earlier reaching a five-week high of $1,659.75.
To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
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