Gold declines as strong dollar slow investors’ demand

Gold today declined after a report showed that global demand slowed in the third quarter, and as the dollar held near the highest level in two months, curbing interest in alternative investments. Gold  fell 0.2 per cent to USD 1,722.95 an ounce, while silver gained 0.2 per cent to USD 32.74 an ounce. The dollar was little changed against a six-currency basket, including the euro and yen, rose 1.4 per cent this month.

Gold is still 10 per cent higher this year as stimulus by central banks around the world boosted demand for bullion as a store of value. Global gold demand dropped 11 per cent to 1,084.6 tonnes in the third quarter from a record a year earlier as slowing growth in China cut investment and jewellery purchases, the World Gold Council said.

President Barack Obama is negotiating to reach a deficit-reduction deal with Congress to avert USD 607 billion in automatic tax increases and spending cuts, the so-called fiscal cliff. Billionaire investors George Soros and Louis Moore Bacon increased their stakes in exchange-traded products backed by gold in the third quarter. Total assets held in ETPs, which reached a record 2,596.106 tonnes on November 8, were at 2,595.39 tonnes yesterday.