By Kim Kyoungwha
Dec. 23 (Bloomberg) -- Gold fluctuated in Asia after falling for the past two days as a strengthening dollar reduced demand for the precious metal and volumes waned as investors prepared for yearend holidays.
The Dollar Index, a six-currency gauge of the currency’s value, is trading near its highest level in more than three months, on signs of a recovery in the world’s largest economy. Sales of existing U.S. homes reached their highest level last month in almost three years, a report showed yesterday.
“Commodities including gold will probably remain weak as long as the dollar continues its rise,” said Park Jong Beom, a senior trader with Tongyang Futures Co. in Seoul. “With major market players closing their yearend books, volume is thin.”
Gold for immediate delivery climbed a much as 0.4 percent to $1,088.28 an ounce, having earlier dipped 0.1 percent. The metal was at $1,085.03 at 1:54 p.m. in Singapore. Gold for February delivery in New York was little changed at $1,085.60 an ounce.
Gold has fallen 9.3 percent this month as signs of economic expansion spurred a 5.2 percent advance in the dollar against the basket of six currencies. The greenback is headed for its first monthly increase since June.
Gold, up 23 percent this year, is still headed for its ninth annual gain. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, were unchanged at 1,132.71 metric tons yesterday, according to the fund’s Web site. They reached a record 1,134 tons on June 1.
Among other precious metals, silver fell 0.1 percent to $16.97 an ounce, platinum dropped 0.1 percent at $1,397.25 an ounce and palladium slid 1.3 percent to $353.97 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
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