By Phoebe Sedgman - Aug 7, 2013 10:44 AM GMT+0400
Gold retreated to the lowest level in three weeks, declining for a third day, on speculation that theFederal Reserve will start to reduce bond purchases by the end of the year as the U.S. economy improves. Platinum fell.
Bullion for immediate delivery lost as much as 0.8 percent to $1,273.55 an ounce, the lowest since July 17, and was little changed at $1,283.28 at 2:42 p.m. in Singapore. Gold for December delivery fell as much as 0.8 percent to $1,272.50 an ounce on the Comex in New York, the lowest for a most-active contract since July 17, and was at $1,282.20. Futures slumped a seventh day in the longest losing streak since mid-May.
Aug. 7 (Bloomberg) -- Evy Hambro, portfolio manager at BlackRock Inc.'s World Mining Fund, talks about investment strategy and the outlook for gold and potash. He speaks with Francine Lacqua on Bloomberg Television's "On the Move." (Source: Bloomberg)
Fed Bank of Chicago President Charles Evans, who has backed monetary stimulus, said yesterday that there has been “good improvement” in the labor market and indicated a tapering of the bond-buying program in September is possible. Gold lost 23 percent this year amid speculation the Fed will wind down the quantitative-easing program. U.S. central bankers are scheduled to meet Sept. 17-18 to review the economy and assess policy.
“The market’s still fretting about what the Fed’s going to do with QE,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “We’re starting to see a crescendo of comments from officials.”
Gold rose 7.4 percent in July, the most since January 2012, after Fed Chairman Ben S. Bernanke said it’s too early to decide whether to pare asset buying next month. The Fed said last week that it would maintain the $85 billion program, while warning persistently low inflation could hamper the economic expansion.
Trim Purchases
Fed Bank of Dallas President Richard Fisher, a critic of quantitative easing, said on Aug. 5 that the central bank is closer to slowing the pace of monetary stimulus. Half of the 54 economists in a Bloomberg survey last month expect the Fed to trim bond purchases at its September meeting.
Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by gold, fell to 915.04 metric tons yesterday, the lowest since February 2009, according to data on the fund’s website. Assets have shrunk 435.78 tons this year.
Silver for immediate delivery dropped as much as 0.8 percent to $19.3715 an ounce and was at $19.502. Platinum fell as much as 0.8 percent to $1,416.50 an ounce and traded at $1,425.05. Palladium was little changed at $723.15 an ounce.
To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
