Gold in Asia fell for a second day as crude oil extended its losses
Gold in Asia fell for a second day as crude oil extended its losses, reducing the appeal of the precious metal as a hedge against inflation, Bloomberg reported.
Gold sometimes moves in the same direction as oil, which declined for a third day after plunging 4.5 percent to a one- month low yesterday as investors cut holdings on speculation U.S. summer fuel demand has peaked. Gold and oil have more than doubled in the past five years.
``The sharp drop in oil prices in New York dragged gold prices lower,'' Kazuhiko Saito, chief analyst at Interes Capital Management in Tokyo, said by phone today. ``Some investors are pulling their money out of commodities, such as oil and gold, to put into the equity market.''
Gold for immediate delivery fell as much as $2.43, or 0.4 percent, to $669.58 an ounce and traded at $670.60 at 2:04 p.m. Singapore time. It fell 0.2 percent to $672.01 yesterday. Silver for immediate delivery added 3 cents to $13.02 an ounce.
Crude oil for September delivery fell 39 cents, or 0.5 percent, to $71.67 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 2:06 p.m. in Singapore. The contract fell $3.42 to $72.06 yesterday, the lowest close since July 5 and the biggest drop in seven months.