Gold Trades Near Three-Week Low as Data Adds to Tapering Case

Gold traded little changed after a six-day losing run that sent prices to a near-three-week low as data showed U.S. service industries grew faster than forecast, boosting the case for the Federal Reserve to pare stimulus.

Bullion for immediate delivery was at $1,311.77 an ounce at 8:18 a.m. in Singapore from $1,311.81 yesterday, when bullion retreated to $1,305.98, the lowest level since Oct. 17. The run of six losses was the worst streak since May.

Gold lost 22 percent this year amid speculation the Fed would curb its $85 billion in monthly bond purchases as growth picked up. The Institute for Supply Management’s U.S. non-manufacturing index rose to 55.4 in October from 54.4 the prior month, data yesterday showed. Reports on U.S. gross domestic product and payrolls are due Nov. 7 and Nov. 8 respectively.

“Given the recent string of better-than-expected U.S. economic data, gold may test the $1,300 an ounce level ahead of the payrolls report,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The path of least resistance for gold appears lower.”

GDP grew at a 2 percent annualized rate in the third quarter after a 2.5 percent pace from April to June, according to economists surveyed by Bloomberg before Commerce Department figures. Payrolls probably rose by 120,000 last month after a 148,000 gain in September, Labor Department data may show.

Gold for December delivery rose as much as 0.4 percent to $1,312.70 an ounce on the Comex in New York and traded at $1,311.80. The contract dropped to $1,305.20 yesterday, the lowest level for the most-active contract since Oct. 17.

Silver for immediate delivery was little changed at $21.684 an ounce after gaining and losing at least 0.2 percent. Palladium rose 0.4 percent to $752.30 an ounce, while platinum was little changed at $1,452.25 an ounce.

The Association of Mineworkers and Construction Union, the biggest union in South Africa’s platinum mines, has rejected pay offers exceeding the 6 percent inflation rate, raising the possibility of strikes. Lonmin Plc, Impala Platinum Holdings Ltd. and Anglo American Platinum Ltd., or Amplats, are in wage negotiations with the union.

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

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