Gold Declines as Energy Costs Slide; Silver Prices Rise

Aug. 5 (Bloomberg) -- Gold prices fell, ending a four- session rally, as energy costs dropped, eroding demand for the precious metal as a hedge against inflation. Silver gained.

Crude-oil futures slid as much as 2.4 percent before erasing losses later in the day. The dollar fell as much as 0.4 percent against a basket of six major currencies. Yesterday, gold reached the highest since June 5.

“This stage of advance appears to be nearing a completion,” Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a note. “Players remain on alert for further dollar moves and for signs that oil may commence a corrective move.”

Gold futures for December delivery declined $3.40, or 0.4 percent, to $966.30 an ounce on the Comex division of the New York Mercantile Exchange. The contract climbed 4.3 percent in the previous four sessions, the longest rally since June 26.

“I see support at near $944” an ounce, Al Abaroa, a senior commodities strategist at OptionsPro Corp. in Plantation, Florida, said by e-mail. “The intraday action is overbought, technically justifying the pullback.”

U.S. services industries declined at a faster pace last month than in June, while companies cut another 371,000 jobs, separate industry reports showed today. The data signal rising unemployment that may erode spending. The U.S. Labor Department is set to report on July employment on Aug. 7.

“Jewelry demand remains very quiet,” John Reade, UBS AG’s head metals strategist in London, said today in a report.

Spot Prices Fall

Bullion for immediate delivery fell $1.16, or 0.1 percent, to $965.79 an ounce at 8:41 p.m. local time. The spot price gained 3 percent last month as the dollar dropped 2.2 percent against the currency basket.

Sellers may hamper a gain from current levels, James Moore, an analyst at TheBullionDesk.com in London, said in a note. He cited “further resistance around and above $965 as investors switch capital back into riskier assets, while scrap flows could pick up.”

Metals will remain “reliant on further dollar weakness and equity strength to fuel additional gains,” Moore said.

Silver futures for September delivery advanced 6.5 cents, or 0.4 percent, to $14.76 an ounce in New York.