Gold Prices Fall in London on Slowing Investor, Jewelry Demand
\nBloomberg<\/p>\n
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May 29 (Bloomberg) — Gold prices fell for the first trading session in three in London on speculation that a surge in prices is slowing demand from investors and jewelers.<\/p>\n
Two years of increased investor demand spurred by accelerating inflation helped send gold prices to a 26-year high on May 12. Consumption by jewelers, the biggest buyers of gold, will plunge 15 percent this year, the first drop in three years, Barclays Capital forecast in a May 26 report.<\/p>\n
“Gold is losing all fundamental demand at these prices,” said Jay Mehta, managing director of Mumbai-based Maximus Commodities. “Jewelers won’t buy unless they have a confirmed order.”<\/p>\n
Gold for immediate delivery fell $3.20, or 0.5 percent, to $650.50 an ounce at 12:06 p.m. in London.<\/p>\n
Gold has dropped 11 percent from the 26-year high of $730.40 an ounce. That decline has forced some speculators who were expecting prices to keep climbing to sell, and probably won’t end until prices go to $600 an ounce in the next month, Mehta said.<\/p>\n
Hedge-fund managers and other large speculators have decreased their net-long position in New York gold futures by 17 percent in the two weeks ended May 23, according to U.S. Commodity Futures Trading Commission data.<\/p>\n
Lower jewelry demand this year would follow gains of 3.8 percent last year and 5.5 percent in 2004, according to the Barclays Capital report. “There is little physical justification for the high prices,” Barclays said.<\/p>\n
Barclays still raised its gold price forecast for this year, by $135 to $660 an ounce, citing expectations of a decline in the dollar and the threat of inflation.<\/p>\n
Fifteen of 30 traders, investors and analysts surveyed on May 25 and May 26 from Sydney to Chicago advised buying gold. Seven respondents advised selling and eight were neutral.<\/p>\n","protected":false},"excerpt":{"rendered":"
Gold Prices Fall in London on Slowing Investor, Jewelry Demand Bloomberg May 29 (Bloomberg) — Gold prices fell for the first trading session in three in London on speculation that a surge in prices is slowing demand from investors and jewelers. Two years of increased investor demand spurred by accelerating inflation helped send gold prices […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[411],"tags":[],"yoast_head":"\n