Gold Little Changed as Equities Decline on Earnings Concerns

By Claire Leow and Glenys Sim

Feb. 24 (Bloomberg) -- Gold traded little changed as global stocks tumbled, sending the Asian regional benchmark toward a five-year low, on concern a deepening recession is hurting company earnings.

The MSCI Asia Pacific Index fell 2.3 percent to 74.51 at 12:19 p.m. in Singapore, and is set for its lowest close since August, 2003. Gold has gained 12 percent this year as the index plunged 16 percent.

“Gold experienced profit-taking and long liquidation,” said Walter de Wet, an analyst at Standard Bank Ltd. in Johannesburg. “However precious metals remain well supported by macro-economic turmoil and tumbling global equities.”

Gold for immediate delivery traded at $990.78 an ounce at 2:59 p.m. in Singapore, after earlier dropping much as 0.7 percent to $984.53. The price is down 1.5 percent from the 11- month high of $1,006.29 reached on Feb. 20. Silver rose 0.5 percent to $14.4925 an ounce.

“Because gold is losing some of its momentum, consolidation seems imminent,” de Wet wrote in an e-mail today. “At the current gold price, participants are wary, and price moves higher are becoming lethargic. However, we believe the metal will re- test $1,000 in the next week or two.”

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, stood unchanged at 1,028.98 metric tons yesterday, according to figures on the company’s Web site.

Platinum Gains

Platinum advanced 0.9 percent to $1,087 an ounce at 3 p.m. Singapore time, extending a five-week rally, while palladium added 2.3 percent to $202.50 an ounce.

Platinum may average $1,050 an ounce in 2009 and rise to $1,250 in 2012, compared with earlier estimates of $847 and $942 respectively, Goldman Sachs JBWere Investment Research analysts led by Malcolm Southwood wrote in a report.

“We expect the fall in industrial demand this year to be partly offset by stronger discretionary off-take for jewelry and investments,” said Southwood. “Platinum in particular has a tendency, under certain circumstances, to mimic gold’s price performance as a safe-haven investment.”

“In the medium term, we see platinum in deficit,” which will support the price, Southwood added.

To contact the reporter for this story: Claire Leow in Singapore at cleow@bloomberg.net