Friday, Sep 10, 2010
By Matt Whittaker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Gold futures retreated farther from record levels Friday as investors' desire for the perceived safety of the metal continued to wane, trumping optimism that the International Monetary Fund found a buyer for more than $400 million of the shiny commodity.
The most actively traded gold contract, for December delivery, fell $4.40, or 0.4%, to settle at $1,246.50 an ounce on the Comex division of the New York Mercantile Exchange.
Although the contract posted a record settlement on Tuesday amid European banking jitters, the contract finished the week 0.4% lower as the euro-zone concerns eased and other economic data were encouraging. Equities, often viewed as a proxy for the economy, were higher shortly after gold closed Friday.
"The fact that the stock market's been somewhat healthy this week has probably taken some of the interest out of gold," said Michael Gross, broker and futures analyst with OptionsSellers.com.
Also, gold had simply gotten too expensive for some investors.
"You have some major levels that it's a struggle to get through," said Bob Haberkorn, senior market strategist with Lind-Waldock in Chicago. December gold remains relatively close to the intraday record for a most-active gold contract of $1,266.50 reached in June.
These headwinds outweighed support from news that Bangladesh purchased 10 metric tons of gold from the International Monetary Fund. The IMF, which last year announced plans to sell about 13% of its gold holdings, sold the metal to the central bank of Bangladesh for $403 million based on Tuesday's market prices, it said in a statement late Thursday.
The purchase was supportive of prices because it "reminds market participants that central banks are set to be net buyers of gold this year rather than net sellers," according to a note to clients from Dublin-based bullion dealer GoldCore.
The sales are part of the IMF's plan to unload 403.3 metric tons of gold to create a more stable income model and boost support for low-income countries.
About 212 metric tons were sold off-market to central banks of India, Mauritius and Sri Lanka last November, and the fund said in February it would begin phased sales to the market of the remaining 191.3 metric tons.
Other precious metals traded in New York also fell. Comex December silver fell 0.05%. Nymex October platinum lost 0.7%, and December palladium on the exchange declined 0.4%.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,246.50; previous PM $1,255.00
Spot gold at 1:37 p.m. ET: $1,243.95, down 55 cents; Range: $1,236.95-$1,251.35
Dec gold $1,246.50, down $4.40; Range $1.237.90-$1,253.00
Dec silver $19.845, down 1 cent; Range $19.700-$20.065
Oct platinum $1,542.50, down $10.80; Range $1,540.50-$1,556.50
Dec palladium $519.85, down $1.95; Range $511.75-$525.45
-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
(Rhiannon Hoyle, Ian Talley and Tom Barkley contributed to this article.)
(END) Dow Jones Newswires
September 10, 2010 14:41 ET (18:41 GMT)
