Gold was little changed in London, after reaching a one-week low, as prospects for an imminent attack against Syria receded. Silver rose for the first time in four days.
Gold reached a three-month high of $1,433.83 an ounce on Aug. 28, helping prices climb for a second straight month, amid concern the U.S. will take military action against Syria. U.S. President Barack Obama said on Aug. 31 he will ask members of Congress to back his plan for a military strike on Syria.
The metal slid 17 percent this year as some investors lost faith in gold as a store of value and on speculation the Federal Reserve will slow stimulus. Gold rebounded from a 34-month low of $1,180.50 in June as lower prices boosted demand for jewelry, bars and coins in Asia. Hedge funds and other large speculators are the most bullish since January and sales from bullion-backed exchange-traded products last month were the least this year.
“Uncertainty on whether or not military action will be taken against Syria has taken off some of gold’s safe-haven bid,” Joni Teves, an analyst at UBS AG in London, wrote today in an e-mailed report. “The recent move in gold positioning clearly indicates further reluctance to be short. On the physical front, activity has been quiet of late, as can be expected given elevated price levels.”
Gold for immediate delivery fell 0.2 percent to $1,392.09 an ounce by 5:09 p.m. in London, rebounding from as low as $1,373.38, the lowest since Aug. 23. It gained as much as 0.2 percent to $1,398.33. Bullion for December delivery slipped 0.3 percent to $1,391.80 on the Comex in New York.
U.S. markets are closed today for the Labor Day holiday. Futures trading volume was 61 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Bullion at the afternoon “fixing,” used by some mining companies to sell output, was at $1,392.25 in London, up from $1,391.25 this morning.
Money managers boosted their net-long position, or bets on higher prices, by 34 percent in the week to Aug. 27, as holdings of short contracts slid 37 percent, U.S. Commodity Futures Trading Commission data show. Gold-backed ETP holdings rose during the past three weeks, increasing 7.8 metric tons from a three-year low of 1,946.9 tons on Aug. 8, data compiled by Bloomberg show.
U.S. Congressional leaders have agreed to debate military action against Syria once lawmakers return from their recess on Sept. 9. Britain’s parliament last week rejected a proposed strike.
An official Purchasing Managers’ Index jumped more than estimated to a 16-month high, a Chinese government report showed yesterday. A separate PMI released today by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the largest gain since 2010. Readings above 50 signal expansion.
Silver for immediate delivery climbed 2.9 percent to $24.2045 an ounce in London, after rallying 18 percent in August, the biggest monthly gain since January 2012. Platinum was little changed at $1,522.75 an ounce. Palladium was 1 percent lower at $715.20 an ounce.
Anglo American Platinum Ltd. (AMS) will fire about 3,300 workers, and others will be redeployed or voluntarily quit, as the biggest producer seeks to revive profitability, it said Aug. 30. South Africa’s National Union of Mineworkers, which represents about 64 percent of gold miners in the country, will start a strike over pay from Sept. 3, the Chamber of Mines said on Aug. 30.
To contact the editor responsible for this story: Claudia Carpenter at firstname.lastname@example.org