Gold declines again as Greece dithers

London: Gold declined for a third day in London as European fin-ance ministers held back approval of a rescue package for Greece, curbing demand for commodities.

Five of the six main industrial metals on the London Metal Exchange and oil fell yesterday as the ministers withheld aid in a rebuff that left lawmakers in Athens under government pressure to endorse a newly-minted austerity plan or exit the euro. Holdings in gold-backed exchange-traded products climbed Thursday to near a record.

‘Throwing in towel'

"People are just throwing in the towel because we didn't see a rally and other commodities are down," Afshin Nabavi, a senior vice-president at bullion refiner MKS Finance in Geneva, said yesterday by phone. "Gold is looking a bit top-heavy here, but if it goes below $1,715 [Dh6,299] an ounce, I think we should see a bit of bargain-hunting coming in."

Bullion for immediate delivery fell 0.5 per cent to $1,720.75 an ounce in London yesterday morning. Prices were down 0.3 per cent last week. Gold for April delivery was down 1.1 per cent at $1,722.40 on the Comex in New York.

Gold at the morning "fixing," used by some mining companies to sell output, declined to $1,715.50 an ounce in London from $1,748 at Thursday's afternoon fixing.

The metal gained for an 11th consecutive year in 2011 as investors sought to diversify from equities and some currencies. Gold reached a record $1,921.15 in September and holdings in bullion-backed exchange-traded products are 0.2 per cent below December's all-time high. Assets rose 2.2 metric tonnes Thursday to 2,388.1 tonnes, data compiled by Bloomberg show.