Gold falls two per cent to USD

Dec 29, 2011 |

London

Tags:

economy
Gold

Gold on thursday fell to five-month low as extended gains in the dollar heightened speculation of slowing demand for precious metals as alternate investment.

The gold fell two per cent to USD 1,524.80 an ounce, the lowest since July 7 in London. Silver also traded lower by 1.2 per cent at USD 26.77 an ounce.

The precious metal had climbed to a record USD 1,921.15 an ounce on September 6 as investors and central banks and other so-called official institutions boosted holdings to protect their wealth. ETP holdings rose 0.3 per cent, the first increase in two weeks.

The dollar rose 0.3 per cent against the euro after climbing 1 per cent yesterday. The interest rate for lending gold in exchange for dollars yesterday was 0.15 per cent, the lowest since December 19. One-month lease rates fell to the lowest on record in December as European banks sought ways to secure the US currency amid the region's debt crisis.

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