Gold Drops for First Time in Five Days as Dollar Stems Decline

29 June 2009  Bloomberg.com

Gold fell for the first day in five in Asia as a pause in the dollar’s decline damped demand for the precious metal as a haven investment.

Bullion, which typically moves inversely to the U.S. currency, has dropped 4.3 percent this month as the Dollar Index, a measure of the greenback’s value against six major trading partners, climbed 1.1 percent. The dollar rose against the euro for the first time in three days after China said it won’t alter its foreign-currency reserves suddenly.

“The prospect for higher gold prices rests with investor attitudes and these in turn are likely to be guided by expectations for the dollar’s outlook and the need to hedge against economic and financial risk,” Societe Generale SA analysts led by Frederic Lasserre said in a quarterly report.

http://www.bloomberg.com/apps/news?pid=20601012&sid=adSKaqfo5CYU