By Glenys Sim
Dec. 2 (Bloomberg) -- Gold traded little changed below $800 an ounce in Asia, as the dollar’s strength and a decline in crude oil prices weighed on bullion as a hedge against accelerating consumer prices. Platinum gained.
The U.S. Dollar Index, which tracks the greenback against six trading partners, rose for a third day, while oil fell to the lowest in over three years. Gold is down 7.7 percent this year as oil halved and the dollar index climbed 14 percent.
“Gold’s inverse relationship with the dollar will continue for a while, as investors look for the best place to put their money, with rallies likely to be capped by a general decline in the other commodities,” Zhu Lv, research manager at Shanghai Tonglian Futures Co., said today from Shanghai.
Gold for immediate delivery was almost unchanged at $768.23 an ounce at 2:34 p.m. in Singapore, after rising as much as 1.3 percent as a drop by the most in nearly two months yesterday lured investors. The precious metal slumped as much as 6 percent yesterday, dropping below $800 for the first time in a week.
Gold for February delivery was down 1.1 percent at $768.50 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold for October delivery on the Tokyo Commodity Exchange slumped 5.7 percent to 2,292 yen a gram ($764 an ounce), and Shanghai gold for June delivery tumbled the exchange-imposed daily limit of 5 percent to 168.07 yuan a gram ($759 an ounce).
Platinum rose after losing as much as 9.4 percent yesterday, and as expectations for reduced supply offset concerns about falling demand from the global automotive industry. Carmakers account for more than half of global platinum consumption
Immediate-delivery platinum gained 1.8 percent to $814.50 an ounce at 2:45 p.m. Singapore time, and October-delivery platinum in Tokyo slipped 2.9 percent to 2,410 yen a gram.
‘Reduced Output’
“Platinum prices may be supported going forward by reduced mine output in South Africa,” said James Steel, an analyst at HSBC Securities in New York. “Although it is not clear how much output may fall as a result of the layoffs, the reduction in the workforce inevitably will reduce platinum output.”
Lonmin Plc, the world’s third-largest platinum producer, may cut 1,500 permanent jobs at its Limpopo mine, taking the tally of potential redundancies at its South African operations to more than 6,000.
Platinum is trading at its lowest price relative to gold in about 11 years, signaling investors should buy the silver metal and sell the yellow one, according to Dresdner Bank AG.
“It is a very rare event for platinum to trade this close to or below gold,” Bayram Dincer, an analyst at Dresdner in Zurich, said yesterday by telephone. “You surely have to buy platinum and sell gold. The downside risk is very limited.”
Among other precious metals for immediate delivery, silver rose 0.5 percent to $9.325 an ounce, and palladium was up 0.9 percent at $176.50 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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