Gold fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering.
Gold for immediate delivery lost as much as 0.5 percent to $1,297.67 an ounce, the lowest since July 16, before trading at $1,298.66 by 9:47 a.m. in Singapore, according to Bloomberg generic pricing. The metal has declined from $1,345.17 on July 10, the highest since March 19, and is on course for the first back-to-back weekly drop since May.
Bullion sank 28 percent last year on expectations the Federal Reserve will reduce stimulus. The Standard & Poor’s 500 index rose to a record yesterday as earnings of companies including Facebook Inc. topped estimates. Data yesterday showed gold consumption in China, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014. The metal isn’t likely to get support from Indian demand as import restrictions remain unchanged, according to Commerzbank AG.