LQwD FinTech Corp (LQWDF)

[the cork]

Gold Turns Red - Gold Falls Most in a Year as Dollar Rally Spurs Investor Sales

By Pham-Duy Nguyen

Dec. 4 (Bloomberg) -- Gold dropped the most in a year as a rising dollar prompted some investors to sell bullion on the heels of a rally to an all-time high.

The U.S. Dollar Index, a six-currency gauge of the greenback’s value, rose as much as 1.6 percent after a government report showed U.S. employers cut fewer jobs last month than forecast. Gold futures fell as much as 5.9 percent from a record of $1,227.50 an ounce, set yesterday in New York.

“So many people have piled into gold, so this pop in the dollar is freaking people out,” said Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago. “The dollar is rocking and gold is getting its teeth kicked in.”

Gold futures for February delivery fell $48.80, or 4 percent, to $1,169.50 an ounce on the New York Mercantile Exchange’s Comex unit, the biggest drop for a most-active contract since Dec. 1, 2008. The metal slid 0.5 percent this week, halting a month-long rally.

In London, gold for immediate delivery dropped $48.30, or 4 percent, to $1,159.30 an ounce at 7:35 p.m. local time. Yesterday, the spot price reached a record $1,226.56.

Gold was today’s biggest loser among commodities. The plunge spurred sales of gold stocks. The Philadelphia Stock Exchange Gold and Silver Index of 16 mining companies dropped as much as 7.3 percent, led by Toronto-based Barrick Gold Corp., the world’s biggest producer. Before today, the index climbed 55 percent this year.

Stocks Drop

Barrick fell as much as 10 percent in Toronto Stock Exchange trading, almost eliminating this year’s gain.

Detour Gold Corp., a Canadian miner, sank as much as 10 percent in Toronto. Before today, the shares more than doubled.

Hedge-fund billionaire John Paulson, who plans to start a gold fund next month investing in mining companies and bullion- related derivatives, held 10.3 million shares, or about 15 percent of Toronto-based Detour as of Oct. 31, according to a regulatory filing.

Losses accelerated after the Labor Department in Washington released figures today showing employers cut the fewest jobs in a month since the recession began. The nation’s jobless rate fell to 10 percent in November, dropping from a 26-year high in October.

“Gold is going to remain vulnerable to these sell-offs,” Zeman said. “The dollar is rocketing higher because economic recovery will eventually lead to rate hikes.”

Dollar Decline

The dollar weakened this year as the Federal Reserve kept benchmark U.S. interest rates near zero percent since December 2008 in a bid to revive lending after the worst financial crisis since World War II. Before today, the dollar index sank 8.2 percent while gold rallied 38 percent.

“Not only is speculative length in gold at a record high, history shows U.S. dollar losses in December will be recouped in the first four weeks of the new year,” Deutsche Bank AG analysts said today in a report.

Gold’s rally pushed its 14-day relative strength index, a gauge watched by some investors as an indicator of future direction, to 83.5 yesterday. The index fell below 60 today. Some analysts and investors who use price charts view a reading of more than 70 as a signal that a decline is imminent.

“Gold is going to fall under its own weight,” said Tom Hartmann, an analyst with AltaVista Worldwide Trading Inc. in Mission Viejo, California. “There aren’t a lot of people out there who have been short on gold.”

Price Outlook

Bullion will gain next week, according to 19 of 24 traders, investors and analysts surveyed by Bloomberg before today. Five forecast lower prices.

Goldman Sachs Group Inc. yesterday raised its 12-month gold forecast to $1,350 an ounce, from a previous estimate of $960. The metal will average $1,265 an ounce next year, the New York- based bank said.

“I wouldn’t be surprised if people see this as a bargain- buying opportunity,” LaSalle’s Zeman said.

The metal has rallied on news that central banks including India and Russia increased their gold holdings and on speculation that governments, the biggest bullion holders, will buy more.

“It is a bull market, and in bull markets one buys weakness when weakness avails itself,” economist Dennis Gartman told clients in his Gartman Letter today. He said he’d buy if the metal trades below $1,200 by a few dollars.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, increased for a fourth straight day, adding 0.3 metric ton to 1,131.49 tons yesterday, according to the company’s Web site. The fund’s holdings reached a record 1,134 tons on June 1.

Among other precious metals in New York, silver futures for March delivery fell 60.8 cents, or 3.2 percent, to $18.52 an ounce, paring the week’s gain for the most-active contract to 1 percent.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSceNCXXDIiY