Singapore - Gold declined to the lowest level in a week as the dollar traded near a decade-high and US equities advanced to records, cutting demand for a protection of wealth. Silver slumped to the lowest price in almost two months.
Bullion for immediate delivery lost as much as 0.9 percent to $1,195.50 an ounce, the lowest since February 24, as was at $1,200.30 at 10.38am in Singapore, according to Bloomberg generic pricing. The metal dropped 0.5 percent on Monday, extending February’s 5.5 percent fall.
The Bloomberg Dollar Spot Index rose to its highest level in more than 10 years on Tuesday after a measure of US consumer purchases increased in January, a sign the plunge in gasoline is helping boost the biggest part of the US economy. The Nasdaq Composite Index closed above 5,000 for the first time in 15 years on Monday, while the Dow Jones Industrial Average and Standard & Poor’s 500 Index reached records.
“The stronger dollar and higher US equities mean the market’s risk appetite is very strong,” Helen Lau, a Hong Kong- based analyst at Argonaut Securities Asia Ltd, said by phone. “If investors have a strong appetite for risk, they don’t need to buy gold, which is an asset to preserve value.”
Federal Reserve Chair Janet Yellen last week sought to prepare investors for a change in the Fed’s pledge to be patient on raising interest rates, saying it would provide flexibility to tighten when conditions are ripe. A shift would signal the economy has improved to the point where an increase “could be warranted at any meeting,” Yellen said.
Gold for April delivery lost 0.7 percent at $1,199.20 on the Comex in New York. Silver for immediate delivery was 1 percent lower at $16.2336 an ounce after declining as much as 1.9 percent to $16.0832, the lowest since January 5.
Spot palladium decreased 0.9 percent to $822.83 an ounce. The price advanced on Monday to $833.30, the highest level since September 18, as it gained for a sixth day. Platinum slid 0.8 percent to $1,181.13 an ounce.
Bloomberg