(Bloomberg) -- Gold fell to the lowest level in more than four months as the accord between Iran and world powers damped demand for a haven, while holdings in exchange- traded products extended declines. Silver sank to the lowest in more than 15 weeks, while platinum slid to a one-month low.
Bullion for immediate delivery lost as much as 1.5 percent to $1,225.55 an ounce, the lowest since July 8, and traded at $1,230.43 at 2:52 p.m. in Singapore. Silver slid as much as 1.3 percent to $19.6114 an ounce, the lowest since Aug. 8.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, shrank to 852.21 metric tons on Nov. 22, the least since January 2009, and have contracted 37 percent in 2013. Gold tumbled 26 percent this year after a 12-year rally as investors sold metal from ETFs at a record pace on expectations that the Federal Reserve will start to cut its $85 billion-a- month of bond buying and as inflation fails to pick up.
“A lot of the risk premium, the safe haven status that gold has, the reason that people bought gold is not there,” Jonathan Barratt, chief executive officer of Barratt’s Bulletin, said on Bloomberg Television’s “First Up”. “You can certainly see that in developments in the Middle East as well. We’re losing a lot of the riskier concerns out there and as a result, many people are revising their portfolio. It’s evidenced by the draw in the ETF market.”
Gold is struggling against a rising dollar, while the weakness in oil could also impact bullion, Edward Meir, an analyst at INTL FCStone, wrote in a report today.
Brent crude slumped from a six-week high today, and the dollar reached the strongest in six months against the yen after Iran agreed to curtail its nuclear activities and in return won an easing of “certain sanctions” on oil, auto parts, gold and precious metals. The deal, which is reversible, was announced yesterday after five days of talks in Geneva.
Gold for February delivery on the Comex in New York slid as much as 1.5 percent to $1,226.40 an ounce, also the lowest since July 8. Futures were at $1,230.10 in trading that was 84 percent above the average volume for the past 100 days at this time.
Spot silver traded at $19.6149 an ounce, dropping for a second day. Platinum lost as much as 0.6 percent to $1,376.95 an ounce, the lowest since Oct. 15, before trading at $1,377.49. Palladium fell 0.5 percent to $711.84 an ounce.