Gold Holds Near One-Week Low as Investors Weigh Stimulus Outlook

Gold traded near a one-week low as investors weighed the outlook for monetary stimulus before the Federal Reserve releases minutes of its last meeting and a report that may show U.S. consumer prices stagnated last month.

Bullion for immediate delivery traded at $1,274.83 an ounce at 10:17 a.m. in Singapore from $1,275.65 yesterday, when prices fell to $1,269.32, the lowest since Nov. 13. Gold for December delivery was little changed at $1,273.80 on the Comex.

Federal Reserve Chairman Ben S. Bernanke said yesterday that while the U.S. labor market has improved since the start of the bank’s bond-buying program, a “preponderance of data” would be needed to begin removing accommodation. The Fed is due to publish minutes of its October meeting today. Consumer prices probably stagnated last month after increasing 0.2 percent in September, according to a Bloomberg survey of analysts.

“The concern is that we start to build on this deflationary feeling that nothing is happening,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin in Sydney. “The ETF market is continuing with sales, moms and dads are getting out and getting into other things. There’s no real risk premium attributed to gold at the moment.”

Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, dropped to 863.01 tons yesterday, the lowest since February 2009, according to data on its website. Gold tumbled 24 percent this year, while global equities climbed 18 percent.

Asset Purchases

Fed policy makers will probably pare the pace of monthly asset purchases to $70 billion from $85 billion at their March meeting, according to the median estimate in a Bloomberg survey. The benchmark interest rate will probably stay low long after the purchases end, according to Bernanke.

Silver for immediate delivery lost as much as 0.6 percent to $20.2588 an ounce, before trading little changed at $20.396. Prices dropped to $20.2254 yesterday, the lowest since Aug. 9.

Platinum fell as much as 0.5 percent to $1,411.60 an ounce and was at $1,414.47. The metal touched $1,405.15 yesterday, the lowest since Oct. 17. Palladium advanced 0.3 percent to $722.59 an ounce, extending a rebound from yesterday’s low of $713.03, the lowest since Oct. 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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