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Gold Posts Biggest Monthly Drop in 28 Years as Dollar Climbs
Posted By admin On November 1, 2008 @ 5:35 am In Money Watch | Comments Disabled
Saturday, Nov 1, 2008
Gold futures fell, posting the biggest monthly decline in 28 years, as the dollar climbed, reducing the appeal of the precious metal as an alternative investment. Silver also fell.
The dollar rebounded against a weighted basket of six major currencies after dropping 2.8 percent in the previous two days. Equities worldwide were poised for the biggest monthly decline ever. Gold has dropped 14 percent this year, while the dollar index gained 13 percent.
“Global liquidation means more money from foreign assets are going into the dollar,” said Adrian Day, the president of Adrian Day’s Asset Management in Annapolis, Maryland. “The dollar is seen as a safe haven. There’s also liquidation of gold itself, which is easily sold.”
Gold futures for December delivery fell $20.30, or 2.7 percent, to $718.20 an ounce on the Comex division of the New York Mercantile Exchange. This month, the price dropped 18 percent, the most since March 1980.
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Silver futures for December delivery fell 5.5 cents, or 0.6 percent, to $9.73 an ounce. The metal declined 21 percent this month and is down 35 percent this year.
The euro traded as low as $1.2668 today. It reached a record $1.6038 on July 15.
Gold may fall to $620 should the dollar strengthen to $1.20 against the euro, said Joel Crane, a metals strategist at Deutsche Bank AG in New York. “Cash is just more predictable than gold now,” he said.
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