SINGAPORE. — Gold’s image as a haven asset has taken a battering with the metal heading for its third-straight annual loss amid the sale of gold-backed funds by investors.
Bullion for immediate delivery was little changed at $1 061.65 an ounce at 8:05 am in Singapore after declining 0,7 percent on Wednesday, according to Bloomberg generic pricing.
It’s down 10 percent this year following a 1,4 percent drop in 2014 and a 28 percent loss in 2013.
Gold is in the longest slump since 2000 as the dollar surged on the back of monetary policy tightening in the US, joining a collapse in prices of commodities from iron ore to oil. Holdings in gold exchange-traded products have declined 10 times in the last 13 sessions to 1 466.45 metric tons, near the lowest in more than six years.
“Gold is suffering from the general exodus out of commodity investments,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “Being one of the most- traded commodities through ETF’s, the selling pressure from paper investors has been felt particularly hard and gold’s safe- haven status has suffered.”
Gold will face a tough challenge at the start of 2016 and prices may drop toward the $1 000 level before recovering toward $1,200 by the end of the year as the dollar and bond yields retreat, Hansen said. — Bloomberg News.