Gold declined for a third consecutive session in London
Gold declined for a third consecutive session in London as the euro traded near the lowest in a week against the dollar, eroding the metal's appeal as an alternative investment.
The euro slumped on speculation the European Central Bank will hold its benchmark rate at 4 percent today, as government officials expressed concern over the currency's gains. Some investors buy the metal as a hedge against declines in the U.S. currency. Bullion gained 14.5 percent in the third quarter, the biggest increase since 1990, as the dollar slid 5.4 percent against the euro.
Gold may be headed for ``a period of consolidation,'' Alexander Zumpfe, a trader at Hanau, Germany-based Heraeus Metallhandels GmbH, the owner of five precious-metals refineries, said by phone today. ``We're seeing more selling, especially if the dollar continues to strengthen.''
Gold for immediate delivery in London fell as much as $3.81, or 0.5 percent, to $724.09 an ounce. It traded at $724.79 as of 9:39 a.m. local time. Bullion climbed to $747.90 on Oct. 1, the highest since January 1980.