Gold at a crossroads

February 5, 2015 10:08 AM

Gold is losing momentum after the best month in three years as investors slow deposits to funds backed by the metal.

Prices fell three of the past four days, bringing losses to 3.4% since gold reached a five-month high in late January. Assets in exchange-traded funds tracking the metal have held steady after a surge last month. Silver reached the lowest in almost a week.

“Trade has been very choppy and that suggests nervousness as the news flow affects sentiment this way and that,” William Adams, head of research at FastMarkets Ltd, said by e-mail. “The precious metals are to varying degrees still consolidating after the strong rallies in January.”

Gold for immediate delivery retreated 0.5% to $1,262.73 an ounce by 1:52 p.m. in London, according to Bloomberg generic pricing. Futures for delivery in April slipped 0.2% to $1,262.20 an ounce on the Comex in New York. Silver fell as much as 2.5% to $16.9297 an ounce in London, the lowest since Jan. 30, before trading at $17.2445.

Gold rose 6.6% this year, boosted by concern that Greek debt negotiations will undermine the region’s financial stability. The European Central Bank said Wednesday that it will no longer accept junk-rated collateral from Greece, citing doubt over the government’s commitment to previous reform pledges.

Bullion held in ETPs increased 0.2% to 1,670.7 metric tons on Wednesday, reversing most of the previous day’s withdrawal, according to data compiled by Bloomberg. Assets rose 4.1% in January, the most since 2011.

Platinum fell 0.5% to $1,234.75 an ounce in London and palladium slipped 0.3% to $790.55 an ounce.

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