Gold dropped for a third day in Asia, on decreased investment and physical demand following the metal’s rally to more than $900 an ounce.
Bullion also fell alongside other commodities on concern that the swine flu outbreak will delay economic recovery and damp demand for raw materials. Oil declined for a third day on speculation demand will drop as the outbreak curtails travel.
“There’s lacklustre demand, on the investment and physical fronts,” Lin Yuhui, research manager at China International Futures Co, said today from Shenzhen. “Weakness in the commodities complex is weighing gold down as well.”
Bullion for immediate delivery lost as much as 0.6 percent to $887.96 an ounce, and was at $889.35 at 8:56 a.m. in Singapore, down 2.6 percent this week.
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were at 1,104.45 metric tons for a fourth day yesterday.
Total gold sales in India, the world’s largest consumer, were down during the biggest gold festival this week, according to MF Global Ltd.
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“Pressure was applied by reports of weak demand during the auspicious Akshaya Tritiya festival,” MF Global analyst Tom Pawlicki, said in a report. “Early word from the Bombay Bullion Association was that rising prices and the economic slowdown have hit consumers’ spending capacity. Total gold sales were down between 20 percent and 40 percent.”
The association had expected India’s imports to double in April from 25 tons a year ago. Sales of almost 49 tons of gold bars, jewelry and coins were attributed to the 2008 festival, according to the World Gold Council.
Among other precious metals for immediate delivery, silver fell 0.2 percent to $12.455 an ounce, palladium lost 0.5 percent to $215.50 an ounce, and platinum gained 0.4 percent to $1,098 an ounce at 8:58 a.m. in Singapore.