Home Forex Market News Gold Extends Drop From 3-Week High as Mideast Tensions Assessed

Gold Extends Drop From 3-Week High as Mideast Tensions Assessed

Gold extended declines from a three-week high as investors weighed tensions in the Middle East and Ukraine, while assets in the biggest exchange-traded product capped the largest weekly contraction in three months.

Gold for immediate delivery fell as much as 0.3 percent to $1,305.28 an ounce, and traded at $1,306.01 at 2:16 p.m. in Singapore, according to Bloomberg generic pricing. The metal rose on Aug. 8 to $1,322.76, the highest since July 18, as President Barack Obama authorized air strikes in Iraq, then erased gains to end 0.2 percent lower as U.S. equities rallied.

Bullion climbed 1.2 percent last week, snapping three weeks of losses that was the longest such run since September, as unrest escalated in the Middle East and Ukraine. Israel and Gaza Strip militants began to observe another Egypt-brokered truce, while Ukraine’s military dismissed pro-Russian rebels’ offer of a cease-fire and demanded that they surrender.

“While it appears as though concerns are fading, as long as geopolitical risks still exist in the background, gold will continue to be supported,” said Zhu Siquan, an analyst at GF Futures Co. from Guangzhou, China. “We’ll get some buying on headlines but we’re not going to see large investor interest, as evidenced by the SPDR outflows.”

Holdings in the SPDR Gold Trust fell 0.2 percent to 795.86 metric tons on Aug. 8. For the week, the holdings contracted 0.8 percent, the most since the period to May 2, and dropped below the level at which they ended last year.

Gold for December delivery declined as much as 0.4 percent $1,306.40 an ounce on the Comex in New York, before trading at $1,307.30.

Silver for immediate delivery decreased 0.2 percent to $19.865 an ounce. Spot platinum lost 0.5 percent to $1,468.38 an ounce, while palladium retreated 0.2 percent to $858.75 an ounce.

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