Oil fell for a second day in New York as speculation Europe will struggle to contain its debt crisis countered signs of declining fuel stockpiles in the U.S., the world’s largest crude consumer. Brent rose in London.
West Texas Intermediate oil slipped, extending a 0.9 percent drop yesterday, as Italy’s borrowing costs climbed, deepening concern that Europe’s turmoil is worsening. U.S. crude inventories probably shrank for a second week, according to a Bloomberg News survey before an Energy Department report tomorrow. Hedge funds raised bullish bets on oil the most since May, a Commodity Futures Trading Commission report showed.
Gold Declines as Strengthening Dollar Curbs Demand; Paulson Cuts Holding
Gold declined for a second day in London as a stronger dollar curbed demand for the metal as an alternative asset. Billionaire investor John Paulson cut his holdings by 36 percent in the SPDR Gold Trust last quarter.
The euro fell versus the dollar for a second day after Italy’s borrowing costs surged to the highest level since 1997 at a note auction and Mario Monti, the nation’s premier-in- waiting, struggled to get political parties to help form his new Cabinet. While Paulson and Eric Mindich sold shares in the SPDR exchange-traded product as prices rallied to a record, investors George Soros and Paul Touradji bought shares, according to Securities and Exchange Commission filings.
“A stronger U.S. dollar would limit the upside in gold for now,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. Still, “the stalemate in Europe cannot be resolved overnight, while concerns over excess liquidity on both sides of the Atlantic as a result of lax monetary policies also add to a positive gold scenario.”
Immediate-delivery gold fell $17.10, or 1 percent, to $1,763.32 an ounce by 9:18 a.m. in London. Gold for December delivery was down 0.8 percent at $1,764.10 on the Comex in New York.
