By Kim Kyoungwha
July 29 (Bloomberg) -- Gold was little changed, reversing earlier gains, as a rising U.S. currency reduced the appeal of raw materials priced in dollars.
Bullion rose earlier after U.S. stocks fell yesterday as consumer confidence trailed projections and companies posted worse-than-expected results, fueling safe-haven demand for the precious metal. Gold tumbled by the most since June 5 yesterday as the Dollar Index, a six-currency gauge of the greenback’s value, rebounded from a 2009 low.
“If the dollar keeps rising, that would undermine gold prices further but at this point of time, it’s fairly neutral outlook for gold,” said Toby Hassall, a research analyst with Commodity Warrants Australia. “The dollar’s strength will be the primary driver at this point.”
Gold for immediate delivery fell 0.2 percent to $935.35 an ounce at 3 p.m. in Singapore. The metal is up 6.2 percent this year. The dollar weakened to $1.4187 against the euro from $1.4167 yesterday.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 3.36 metric tons to 1,083.25 tons as of July 28, according to the company’s Web site.
Still, “with daily momentum rolling over, we look for further downside in the sessions ahead” toward the low of a range between $905 and $960, Barclays Capital said in a report yesterday. The brokerage expects gold to rise above $1,033 an ounce in the final quarter of 2009.
Separately, South African gold producers agreed to boost workers’ pay by between 9 percent and 10.5 percent this year, concluding negotiations, the Chamber of Mines said in an e- mailed statement yesterday.
Among other precious metals for immediate delivery, silver was down 0.8 percent at $13.62 an ounce, platinum was down 0.7 percent at $1,192.75 an ounce and palladium was down 1.3 percent at $257.25.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
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