Gold Holds Gains as Investors Weigh Stimulus Before GDP Report

Gold held gains after the biggest advance in almost two weeks as investors await reports that may show the U.S. economy lost momentum last quarter and employers added fewer workers, boosting the case for sustained stimulus.

Bullion for immediate delivery was at $1,318.78 an ounce at 8:08 a.m. in Singapore from $1,317.93 yesterday, when prices climbed 0.5 percent, the most since Oct. 24. Gold for December delivery was little changed at $1,317.20 on the Comex.

Gold dropped 21 percent this year, set for its first annual loss since 2000, amid speculation the Federal Reserve would curb stimulus as economic growth picked up. Gross domestic product grew at a 2 percent annual rate in the third quarter from 2.5 percent in the previous period, according to a Bloomberg survey before the Commerce Department report today. Employers added 120,000 jobs in October from 148,000 in September, economists predicted before data on Nov. 8.

“We believe the market will focus on upcoming economic releases, particularly U.S. monthly non-farm payroll number and unemployment releases,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Certainly expectations that the Fed will taper eventually are weighing on gold prices. In the meantime, the Fed may be uncertain about how to manage” quantitative easing, he said.

Gold fell to $1,305.98 on Nov. 5, the lowest since Oct. 17, after the Institute for Supply Management’s U.S. non-manufacturing index rose. The central bank won’t reduce stimulus until March, according to the median estimate of economists in a Bloomberg survey Oct. 17-18.

Fed Bank of San Francisco President John Williams, who doesn’t vote on policy this year, said Nov. 5 that economic growth in recent months has fallen short of his expectations. “We’re still a long ways from where we want to be,” he said.

Silver for immediate delivery was little changed at $21.803 an ounce after rising 0.5 percent yesterday. Platinum declined 0.2 percent to $1,462.88 an ounce. Palladium was little changed at $763.90 an ounce after climbing to $765.04 yesterday, the highest level since Aug. 16.

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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