(Bloomberg) -- Gold fell the most since December as gains in the dollar and higher equity prices limited demand for haven assets.
The dollar rose against other G-10 currencies and U.S. stocks advanced for a second session, while the yield on the U.S. 10-year note touched the highest since May 16. Higher yields dampen the allure of non-interest bearing gold.
“Gold currently looks vulnerable,” UBS Group AG analyst Joni Teves said in a note. “Higher yields and market participants digesting a hawkish shift in tone among key central banks of late, while equities stay resilient around all-time highs,” are negative for the metal.
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Gold for August delivery on the Comex fell 1.9 percent to settle at $1,219.20 an ounce at 1:39 p.m. in New York. The decline was the biggest since Dec. 15. Bullion touched $1,218.50 an ounce, the lowest since May 11.
The metal closed below $1,238.40 an ounce, its average over the previous 200 days -- a measure watched by some traders for price clues.
“Ongoing risk appetite” is weighing on gold, analysts including Carsten Fritsch, at Commerzbank AG said in a note. Should gold dip below the 200-day moving average “we would likely see technical follow-up selling.”
June and July are normally middling months for gold, with spot metal typically rising by less than 1 percent, compared with rising 3.9 percent on average in Januaries over the past 10 years, and falling about 1.5 percent in March between 2007 and 2016.
In other gold-market news, the Perth Mint reported falling sales in June with 19,259 ounces sold, down by more than a third from May. Meanwhile, Russia increased gold's share in its international reserves in 2016 to 15 percent from 12 percent.
In other precious metals:
- Silver for September delivery fell 3.2 percent, the biggest loss for a most-active contract since March 2.
- Platinum fell on the New York Mercantile Exchange, while palladium rose.
To contact the reporters on this story: Eddie van der Walt in London at evanderwalt@bloomberg.net, Susanne Barton in New York at swalker33@bloomberg.net.
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Joe Richter, James Attwood
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