Gold and silver futures fell the most in a week after a rally by the dollar reduced the appeal of the precious metal as an alternative investment.
The greenback advanced to a four-week high against a basket of major currencies. European Central Bank President Mario Draghi signaled that policy makers are concerned that the euro’s advance may damp inflation and hamper an economic recovery. In 2012, gold gained 7 percent as stimulus programs in the U.S., Europe and Japan spurred concerns that consumer prices would rise.
“The market is reacting to what Draghi said, and everyone is moving to the dollar,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “Absence of inflation is making gold unattractive.”
Gold futures for April delivery declined 0.4 percent to $1,671.30 an ounce at 1:43 p.m. on the Comex in New York, the biggest drop for the most-active contract since Jan. 31.
Silver futures for March delivery fell 1.5 percent to $31.403 an ounce, the biggest slide since Jan. 31.
On Feb. 1, the euro rose to the highest since November 2011 against the dollar.
On the New York Mercantile Exchange, platinum futures for April delivery dropped 0.8 percent to $1,722.30 an ounce, ending a four-session rally. Yesterday, the metal reached $1,744.50, the highest since Sept. 22, 2011.
Palladium futures for March delivery slumped 1.9 percent to $750.45 an ounce on the Nymex, the biggest drop since Jan. 7. Yesterday, the price reached $772.90, the highest since Sept. 6, 2011.
This year, platinum has gained 12 percent, palladium has gained 6.7 percent and silver is up 3.9 percent. Gold has dropped 0.3 percent