Gold traded little changed below $900 an ounce in Asia after global equities rallied and bond yields rose, eroding the metal's appeal as an investment haven, Bloomberg reported
Asian shares gained for a second day on optimism a turnaround at Citibank Inc. could signal that the worst of the global banking crisis is over. Treasuries were little changed after the biggest drop in five weeks as rising stock prices reduced demand for the refuge of government debt.
“Gold may weaken further if the equity rally holds,” said HSBC Securities analyst James Steel. “The combination of an increase in investor risk appetite and a recovery in the financial markets undermine gold prices.”
Gold for immediate delivery traded at $897.92 an ounce at 2:20 p.m. Singapore time. Earlier the metal dropped as much as 0.6 percent to $892.65 an ounce, extending yesterday’s 2.6 percent decline.
Assets in the SPDR Gold Trust, the biggest such fund backed by bullion, were unchanged for a second day yesterday after falling for the first time in two months on March 6.
HSBC Holdings Plc’s chief in Asia, Sandy Flockhart, said today January performance was better than expected. Citigroup Chief Executive Officer Vikram Pandit wrote in an internal memorandum that the bank is having its best quarter since the third quarter of 2007.
Among other precious metals for immediate delivery, silver was little changed at $12.64 an ounce, palladium was unchanged at $198 an ounce, while platinum rose 0.7 percent to $1,049 an ounce.