By Phoebe Sedgman & Whitney McFerron - Aug 29, 2013 3:01 AM PT
Gold retreated from a three-month high on speculation U.S. economic data will reinforce the case for the Federal Reserve to slow stimulus.
Data may show today that the U.S. economy expanded more than previously estimated, while applications for jobless benefits declined, adding to the case for the Fed to taper stimulus. Gold slid 16 percent this year amid speculation the Fed will begin cutting its $85 billion monthly bond-buying program, which helped the precious metal cap a 12-year bull run in 2012.
Gold jewelry sit in display cabinets as a salesperson serves customers at a jewelry store in Jakarta. Photographer: Dimas Ardian/Bloomberg
Aug. 28 (Bloomberg) -- Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney, talks about copper, nickel, gold and oil. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
Aug. 29 (Bloomberg) -- Peter Hambro, chairman of Petropavlovsk Plc, talks about the company's first-half loss, debt reduction plans and the business outlook. Patrick Spencer, director of International equity sales at Robert W. Baird & Co., also speaks with Francine Lacqua on Bloomberg Television's "On the Move." (Source: Bloomberg)
“Whether Fed tapering will begin is hinged on data outcomes, so participants will be looking out for whether the data is strong or soft,” said Alexandra Knight, an economist at National Australia Bank Ltd.
Gold for immediate delivery fell 0.6 percent to $1,409.40 an ounce at 10:44 a.m. in London, dropping for the first time in six days. Prices rallied to $1,433.83 yesterday, the highest since May 14, on concern the U.S. and its allies will launch a military strike in retaliation for Syria’s alleged use of chemical weapons. Gold for December delivery fell 0.7 percent to $1,409.50 an ounce on the Comex in New York.
A Commerce Department report today may show U.S. gross domestic product expanded 2.2 percent in the second quarter, according to a Bloomberg survey of economists, up from the government’s earlier estimate of 1.7 percent. U.S. initial jobless claims may have dropped to 332,000 in the past week from 336,000 a week earlier, a Bloomberg survey showed before a Labor Department report today.
Asset Purchases
Fed Chairman Ben S. Bernanke said in June that a reduction in asset purchases may come this year if economic performance improves. Sixty-five percent of economists in a Bloomberg survey this month said the first reduction in stimulus would come at the Sept. 17-18 meeting of the Federal Open Market Committee.
Gold is still heading for a second monthly gain as prices, which bottomed in June, climb on increased sales of jewelry and bars. Bullion also has been supported by haven demand spurred by Syrian tension and a halt in the decline in exchange-traded product holdings.
Silver for immediate delivery slumped 1.4 percent to $24.005 an ounce in London. Prices touched $25.1046 yesterday, the highest since April 15, before closing lower. Silver futures trading volumes on the Comex in New York were more than double the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Platinum fell 0.8 percent to $1,524.90 an ounce, paring a second monthly climb. Palladium retreated 0.8 percent to $739.08 an ounce, also reducing a second monthly advance.
To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
