Gold headed for a weekly drop after its biggest fall in a month, as Federal Reserve Chairman Ben S. Bernanke refrained from signaling steps to boost the economy even as Europe’s debt crisis roils markets and hurts growth.
Immediate-delivery gold fell as much as 2.1 percent to $1,556.68 an ounce before trading at $1,568.20 at 10:29 a.m. in Singapore, down 3.4 percent this week. The metal dropped 1.9 percent yesterday, the most since May 8, after Bernanke told lawmakers the central bank remains prepared to “take action as needed” without specifying measures, before the Fed’s two-day policy-setting meeting starting June 19.
China cut key lending and deposit rates yesterday for the first time since 2008 ahead of inflation, output and trade data this weekend. Bernanke said that further rounds of stimulus may have “diminishing returns,” while European Central Bank President Mario Draghi on June 6 highlighted the limitations of current policy tools. That sent Asian stocks and commodities lower today, and strengthened the dollar for the first time in three days against a six-currency basket.
Gold fell as Bernanke “offered few hints that further monetary stimulus was imminent,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “China’s cut in benchmark interest rates last night, coming ahead of the data release this weekend, potentially points to risk of weaker May data than expected.”
August-delivery bullion fell 1.1 percent to $1,571 an ounce on the Comex in New York. Futures tumbled 2.8 percent yesterday, the most since April 4. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, stood unchanged at a two-week high of 1,274.79 metric tons yesterday, the company’s website showed.
Spot silver dropped 1.3 percent to $28.235 an ounce, wiping out its first weekly gain in seven weeks. It dropped 2.9 percent yesterday, the most in two months. Cash platinum declined 0.9 percent to $1,428.75 an ounce, and palladium slid 0.6 percent to $620 an ounce.
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