Gold falls as equity strength curbs investor demand

London, June 4. Gold today fell after climbing the most in two weeks yesterday, as a gain in equities curbed demand for the metal as a protection of wealth. Gold fell 0.8 per cent to USD 1,399.65 an ounce and silver by 0.9 per cent to USD 22.53 an ounce. Gold jumped 1.7 per cent yesterday, the most since May 20, as US manufacturing unexpectedly contracted in May at the fastest pace in four years. The dollar had rebounded from a three week low yesterday. European equities climbed as Federal Reserve Bank of Atlanta President said recent data suggest the economy is not strong enough to justify a reduction in the central bank’s bond-buying program. India today tightened rules for importing bullion. Gold slid 16 per cent this year as equities rose and on speculation the Fed may scale back quantitative-easing measures that helped bullion cap a 12-year bull run in 2012. Holdings in exchange-traded products fell 3.6 metric tons to 2,144.7 tons, the lowest since May 2011. The US Dollar Index, a gauge against six currencies, slid 0.9 per cent after a report showed the Institute for Supply Management’s factory index fell to 49, the lowest reading since June 2009. The Reserve Bank of India restricted all nominated agencies including state-trading houses and banks from importing gold on consignment basis only to meet the needs of exporters of gold jewelry. The restriction was previously only on banks. India was the top gold buyer in 2012.