Gold Falls for Fifth Day After Dollar Gains, Crude Oil Declines

By Feiwen Rong

July 9 (Bloomberg) -- Gold fell for a fifth day in Asia as the dollar traded near a two-week high against the euro and crude oil fell, eroding the metal's appeal as a hedge against inflation.

The dollar also rose versus the yen after Federal Reserve Chairman Ben S. Bernanke said the central bank may extend its emergency-loan program for securities firms into next year. Crude oil in New York has dropped more than $9 from a record $145.85 a barrel on July 3. Gold fell 2.7 percent in the past four days.

The gold prices declined ``as oil prices fell and the U.S. dollar recovered some lost ground,'' Darren Heathcote, head of trading at Investec Bank Ltd., wrote in a report today.

Bullion for immediate delivery fell as much as $3.45, or 0.4 percent, to $916.17 an ounce before trading at $919.23 an ounce at 10:27 a.m. in Singapore. Silver added 0.2 percent to $17.7975 an ounce.

The dollar traded at $1.5661 at 10:29 a.m. in Singapore from $1.5670 in New York yesterday. It reached $1.5611 on July 7, the highest level since June 25. It traded at 107.48 yen from 107.50 yen yesterday. It touched 107.75 on July 7, the strongest level since June 26.

The dollar climbed 0.4 percent against the euro yesterday after Bernanke said in a speech in Arlington, Virginia, that the Fed is committed to financial stability and may extend the duration of funding to primary dealers.

Crude oil for August delivery traded at $136.16 a barrel after tumbling 3.8 percent yesterday.

Gold for August delivery fell 0.3 percent to $920.40 an ounce in after-hours electronic trading on Comex at 10:33 a.m. Singapore time.

Gold for June 2009 delivery fell 0.5 percent to 3,205 yen a gram ($927 an ounce) on the Tokyo Commodity Exchange at the 11 a.m. local time break, while gold for December delivery traded in Shanghai fell 1 percent to 203.35 yuan a gram ($922 an ounce) at the same time.

To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net