Gold Falls for 2nd Day as ECB Easing Seen Curbing Demand
Frankfurt (Jan 22) Gold declined for a second day on speculation economic stimulus by the European Central Bank will lessen demand for haven assets.
ECB policy makers led by Mario Draghi will propose purchasing 50 billion euros ($58 billion) in assets each month through 2016, two central-bank officials told Bloomberg News before their meeting Thursday in Frankfurt. Gold has climbed 8.5 percent this year on signs of a global economic slowdown.
“There has been a perception that central banks have been losing control, with several changing policy unexpectedly, thus fueling demand for gold,” Matthew Turner, a precious metals analyst at Macquarie Group Ltd., said by phone from London. “The ECB can restore calm today if its policy is seen as effective and commanding broad support.”
Gold for February delivery fell 0.7 percent to $1,284.90 an ounce at 7:18 a.m. on the Comex in New York. Prices on Wednesday topped $1,300, a five-month high. Bullion for immediate delivery retreated 0.9 percent in London.
Investors slowed purchases of exchange-traded products backed by gold, with holdings increasing 2.9 metric tons to 1,636.4 tons. The previous three sessions saw average inflows of 12.6 tons, data compiled by Bloomberg shows.
Silver for February delivery retreated 0.7 percent to $18.055 an ounce in New York. Platinum fell 0.3 percent to $1,273 and palladium declined 0.5 percent to $764.40.