Gold Falls With Silver, Palladium as Global Equities Rise

San Francisco (Nov 18)  Gold futures fell the most in a week as a global equity rally cut demand for precious metals as alternative investments. Silver slumped to a three-month low, and palladium headed for the biggest drop in six weeks.

The MSCI All-Country World Index of equities rose to the highest since January 2008. Investors awaited details of the last Federal Open Market Committee meeting to be published on Nov. 20. Janet Yellen, the nominee to replace Ben S. Bernanke as Fed chairman, signaled on Nov. 14 that she would continue record stimulus until the U.S. economy is stronger. 

“Money is running toward equities,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “Also, people want more information about what the other Fed officials are thinking about tapering.”

Gold futures for December delivery fell 1.2 percent to $1,271.90 an ounce at 12:54 p.m. on the Comex in New York. A close at that price would mark the biggest drop for a most-active contract since Nov. 8. Through Nov. 15, the metal slumped 23 percent this year.

Gold was poised for the first annual decline since 2000. Some investors lost faith in the metal as a store of value amid the equity rally and low U.S. inflation. Economists surveyed by Bloomberg News on Nov. 8 forecast that the Fed probably will delay reductions in bond purchases until March.

Silver futures for December delivery declined 1.8 percent to $20.345 an ounce. Earlier, the price touched $20.29, the lowest since Aug. 9.

On the New York Mercantile Exchange, palladium futures for December delivery fell 2.1 percent to $717 an ounce, heading for the biggest decline since Oct. 3.

Platinum futures for January delivery dropped 1.8 percent to $1,413.30 an ounce. Earlier, the price touched $1,412, the lowest since Oct. 17.

Northam Platinum Ltd. said talks with the National Union of Mineworkers, which called a strike two weeks ago in South Africa over wages, were inconclusive on Nov. 15.