By Glenys Sim
Jan. 23 (Bloomberg) -- Gold declined in Asia as crude oil prices fell and the dollar strengthened, curbing demand for the precious metal as an inflation hedge and alternative investment.
Bullion, up 1.3 percent this week, retreated as the dollar advanced against the euro ahead of a manufacturing and service industries report in Europe. Gold, which tends to move in the opposite direction to the dollar, is down 2.9 percent this year as the euro has slumped 7.6 percent against the dollar.
“In the absence of fresh safe-haven buying, gold is likely to come under pressure amid a deflationary environment or during bouts of dollar strength,” Barclays Capital analysts led by Gayle Berry said in a note e-mailed today.
Bullion for immediate delivery was 0.4 percent lower at $853.75 an ounce at 9:12 a.m. in Singapore, after gaining 0.3 percent yesterday. Silver fell 0.4 percent to $11.36 an ounce.
Gold for February delivery was down 0.6 percent at $853.30 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange, while gold on the Tokyo Commodity Exchange was little changed at 2,451 yen a gram ($856 an ounce).
The euro headed for a fourth weekly loss against the dollar as a composite index of Europe’s manufacturing and service industries dropped to 37.4 in January, the lowest since the survey began in 1998, according to a Bloomberg News survey of economists. The dollar was at $1.2982 versus the euro from $1.3001 late yesterday in New York.
Crude oil fell after a U.S. government report showed a bigger-than-forecast gain in crude stockpiles, and as weak corporate earnings and economic data signaled a deepening recession. Oil for March delivery fell 81 cents, or 1.9 percent, to $42.86 a barrel at 9:51 a.m. Singapore time on the New York Mercantile Exchange.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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