London - Arabstoday
Gold dropped in London as a stronger dollar cut demand for an alternative asset and prompted investors to sell the metal after its climb to near a record. The dollar rose to the highest level in almost six months versus the euro on speculation the European Central Bank (ECB) will cut interest rates amid slowing global growth and a deepening debt crisis. President Barack Obama on Thursday proposed a $447 billion (Dh1.64 trillion) plan to create jobs and boost the US economy, while the European Central Bank on Thursday cut its growth forecasts for this year and next. Gold touched a record $1,921.15 on September 6. \"The dollar is strengthening\" and gold may have formed a so-called double top, which can be viewed as bearish, Jesper Dannesboe, an analyst at Societe Generale SA in London, said. \"There are very good reasons why people long on gold may be taking profits.\" Immediate-delivery gold fell $33.65, or 1.8 per cent, to $1,836.53 an ounce at noon in London. The metal, which typically moves inversely to the greenback, earlier yesterday gained 0.8 per cent and was down 2.5 per cent last week. Gold for December delivery was 0.9 per cent lower at $1,841.60 on the Comex in New York. A double top refers to an M-shaped pricing pattern comprising the August 23 high of $1,913.50 and the all-time high on September 6, a sign for some investors who study technical charts that gold may fall. Obama plan Obama, speaking before a joint session of Congress, demanded six times that lawmakers act \"right away\" on a plan that would boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small business owners. Federal Reserve Chairman Ben S. Bernanke said policy makers will discuss the tools they may need to use to aid the recovery at their meeting this month. Gold \"has had quite a rise\" and investors may be locking in gains, Carole Ferguson, an analyst at Fairfax IS in London, said. \"There are still a lot of uncertainties and gold may well move up from here.\" Gold exchange-traded-product holdings fell on Thursday, declining 3.2 metric tonnes to 2,137.9 tonnes, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons on August 8. Silver for immediate delivery dropped 2 per cent to $41.455 an ounce. Platinum was down 1.5 per cent at $1,832.65 an ounce. Palladium fell 0.7 per cent to $753.50 an ounce.