Gold dropped for the first time in eight days, snapping the longest rally since December 2008, as the euro rebounded and Asian stocks pared declines after Japan’s prime minister resigned, sapping demand for haven investments. Bullion for immediate delivery fell as much as 0.4% to $1,221.10 an ounce, and traded at $1,224 at 10:31 a.m. in Singapore. It climbed for a seventh day to a two-week high of $1,228.85 yesterday. “The gold rally has been driven by risk aversion and safe- haven buying and this is not going to go away anytime soon,” Zhou Li, an analyst at Changjiang Futures Co., said from Hubei. “We’ll see some profit-taking on the way up but the rally remains intact.” Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose to a record 1,268.23 metric tons yesterday, according to data on the company’s website. The euro strengthened to $1.2248 from $1.2229 yesterday when it touched $1.2111, the weakest since April 2006, after a report showed the region’s jobless rate increased to 10.1% in April, the highest rate since June 1998. Most Asian stocks gained after Japanese Prime Minister Yukio Hatoyama said he will step down, fueling a drop in the yen and boosting the earnings outlook of the country’s exporters. Silver for immediate delivery added 0.2% to $18.48 an ounce after falling 0.7% yesterday. Platinum gained 0.8% to $1,560.20 an ounce after declining 0.9% yesterday, while palladium rose 0.8% to $461.50 an ounce, rallying from yesterday’s 2.3% slump.
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