Gold down 1.3%, fails to catch safe-haven bids

SAN FRANCISCO (MarketWatch) — Gold futures traded lower Wednesday, engulfed by concerns surrounding Germany’s failed bond auction and unable to catch safe-haven bids. 

Gold for December delivery GC1Z -0.32%  declined $22.50, or 1.3%, to $1,679.90 an ounce on the New York Mercantile Exchange, with losses picking up after U.S. stocks opened sharply lower. 

Investors have fled to cash, and the data in the U.S. didn’t help matters. In addition, on the eve of the Thanksgiving holiday in the U.S., “it is likely that buyers will wait until next week” before they think to get back to gold, said George Gero, a vice president at RBC Wealth Management, in e-mailed comments.

Gold has tracked stocks and other commodities lately, unable to generate much safe-haven buying interest as investors have parked their money in cash amid the global turmoil or else fled to the dollar or to U.S. bonds. 

Other metals followed on gold’s move lower. Silver for December delivery SI1Z -3.02%  declined $1.50, or 4.6%, to $31.44 an ounce. December copper HG1Z -1.50%  was off 8 cents, or 2.3%, to $3.26 a pound. 

Adding to pressure for metals, the dollar traded higher on Wednesday. The dollar index DXY +0.98% , which compares the U.S. unit to a basket of six currencies, rose to 79.134 from 78.252 late Tuesday. 

A higher dollar pressures prices for metals and commodities in general as it makes them more expensive to holders of other currencies. 

Germany’s bond auction on Wednesday essentially failed, underscoring fears that the bloc’s sovereign-debt crisis can drag even its strongest economy and spurring wholesale flight from assets.

U.S. stocks traded lower as data in the U.S. were mostly negative. U.S. consumers spent less than projected and orders for durable goods fell in October, albeit less than analysts expected. 

In addition, more people than expected submitted filings for first-time jobless benefits last week, although the number of such claims remained under 400,000 for a third consecutive week. 

Source; http://www.marketwatch.com/story/gold-falls-fails-to-catch-safe-haven-bids-2011-11-23