Gold declined for the first time in three days, set for the worst run of monthly losses since 1999, as concern that Europe's fiscal turmoil is worsening boosted the dollar. Platinum fell.
Spot gold lost as much as 0.6 percent to $1,571.43 an ounce and was at $1,578.37 at 3:04 p.m. in Singapore. Bullion is 5.2 percent lower this month, the biggest drop since December and the fourth straight monthly decline. The dollar has gained 4.4 percent against a six-currency basket including the euro in May.
Economists from Bank of America Merrill Lynch to JPMorgan Chase & Co. predict that Greece, which faces a June 17 election, leaving the currency bloc would threaten global prosperity as trade and financial ties spread the fallout. The possibility of a Greek departure sent the cost of insuring Spanish government and financial-institution debt to a record this month and put the euro on track for the biggest monthly decline in eight.
“Whether it’s Greece leaving the euro or Spain being next in line for a bailout, investors are focusing on the crisis in Europe at the moment and picking the dollar as their haven of choice,” said Sun Yonggang, an analyst at Everbright Futures Co., a unit of China’s largest state-owned investment group.
Gold is still up 0.9 percent this year as investors joined central banks in buying the metal to diversify their assets. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose 1.3 percent this year and stood at 1,270.26 metric tons on May 25, according to company data.
China’s Consumption
August-delivery bullion gained as much as 0.9 percent to $1,585.70 an ounce on Comex in New York, before trading at $1,580.80. U.S. markets were closed yesterday for Memorial Day. Cash gold of 99.99 percent purity on the Shanghai Gold Exchange was little changed at 323.70 Yuan a gram ($1,585.95 an ounce), after climbing for the past three days.
Gold consumption in China was 761 tons last year, Wang Shengbin, vice-chairman at the China Gold Association, said yesterday. That compares to the estimate of 769.8 tons from the producer-funded World Gold Council. The country may become the biggest user this year, displacing India, the council predicts.
Cash platinum fell for the first day in three, dropping as much as 0.6 percent to $1,430.50 an ounce, before trading little changed at $1,438.50. One ounce of platinum bought 0.9080 ounce of gold today, after the ratio dropped to 0.9044 yesterday, the least since Jan. 16, according to data compiled by Bloomberg.
Platinum will average $1,750 in the fourth quarter, the median of 13 analyst estimates compiled by Bloomberg shows, as the first drop in mine supply in four years and record car sales, the biggest source of demand, reduce a surplus.
Spot silver rose as much as 0.8 percent to $28.6275 an ounce, and was last at $28.6225. Palladium climbed as much as 0.6 percent to $609.13 an ounce, extending yesterday’s 2.6 percent advance, and last traded at $608.25.
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