Gold Falls to Six-Week Low as Investors Cover Equity Losses

By Nicholas Larkin

June 23 (Bloomberg) -- Gold fell to the lowest in six weeks in London as some investors sold the precious metal to cover losses in equity markets.

The MSCI World Index of shares today fell to the lowest in four weeks after the World Bank yesterday projected the global economy will shrink this year by 2.9 percent, more than its previous forecast for a 1.7 percent contraction. Bullion held in the world’s biggest exchange-traded fund declined for the first time since June 5.

Gold “could well be dragged lower in coming sessions as equity pressure forces cash generation to cover margin requirements,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note.

Bullion for immediate delivery declined as much as $9.46, or 1 percent, to $913.24 an ounce, the lowest since May 12. The metal traded at $917.30 at 9:21 a.m. local time. August gold futures lost 0.4 percent to $917.50 an ounce on the New York Mercantile Exchange’s Comex division.

Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, slipped to 1,131.24 metric tons yesterday from 1,132.15 tons on June 19, the company’s Web site showed.

Silver for immediate delivery in London slipped 0.2 percent to $13.715 an ounce. Platinum was unchanged at $1,163.75 an ounce, and palladium was 0.4 percent lower at $234.55 an ounce.

Platinum held in ETF Securities Ltd.’s exchange-traded commodities fell 1.2 percent to 338,982 ounces yesterday from 343,196 ounces on June 19, according to the company’s Web site.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net