Gold Is Little Changed as Global Slump Damps Commodity Demand

By Pham-Duy Nguyen

Oct. 15 (Bloomberg) -- Gold was little changed on speculation that a global slowdown will reduce demand for precious metals and other raw materials. Silver declined.

U.S. stock-index extended declines after worse-than- estimated slumps in retail sales and New York manufacturing heightened concern the economy is in a recession. UBS AG said gold probably will peak in 2008 after seven annual gains and average $825 an ounce in 2009. The metal climbed to a record in March.

``The problem that gold seems to be suffering from is fewer-than-normal players,'' UBS metals strategist John Reade said in a report. ``Comex traders seem almost sidelined as leveraged investors hoard cash. Jewelry demand is very slow. Safe-haven buying has slowed.''


Gold futures for December delivery rose $1.10 to $840.60 at 9:16 a.m. on the Comex division of the New York Mercantile Exchange. The metal dropped 7.4 percent in the previous four sessions. The record was $1,033.90 on March 17.

Total gold trading on the Comex yesterday was 97,369, compared with 126,405 a week earlier. Volume was an estimated 32,918 today.

Silver futures for December delivery fell 66.5 cents, or 6 percent, to $10.395 an ounce. Before today, the price dropped 26 percent this year.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.