Gold traded near a four-month low, heading for the worst weekly performance since September, after the U.S. Federal Reserve signaled that it may scale back stimulus in the coming months, hurting demand.
Bullion for immediate delivery was at $1,244.29 an ounce at 9:49 a.m. in Singapore from $1,243.08 yesterday, when prices fell to $1,236.88, the lowest since July 9. Bullion is heading for the worst month since June, and it’s declined 3.6 percent this week, the most since the period to Sept. 13.
Gold slumped 26 percent this year on expectations that the Fed will start to cut the $85 billion-a-month of asset purchases that helped gold cap a 12-year bull run in 2012. Data this week showed that U.S. jobless claims fell more than forecast after minutes from the Fed’s last meeting reported that policy makers expected further improvement in the labor market to warrant trimming the pace of purchases in the coming months.
“The Fed minutes suggested that officials were looking for ways to exit or at least slow down, in fairly short order, the central bank’s asset-purchase program, which has been seen as supportive of gold prices,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner.
Gold for delivery in December traded at $1,242.70 an ounce on the Comex in New York from $1,243.60 yesterday, when prices touched $1,235.80, the lowest since July 9. Trading volume was 51 percent below the average for the past 100 days at this time. CME Group Inc. reduced the margin requirements on gold trading, cutting the minimum cash deposit for speculators 9.4 percent to $7,975 per 100-ounce contract at the close of trading today.
Billionaire hedge-fund manager John Paulson, the largest holder in the SPDR Gold Trust, told clients Nov. 20 that he wouldn’t personally invest more money in his gold fund because it isn’t clear when inflation will accelerate, according to a person familiar with the matter. The SPDR fund is the world’s biggest bullion-backed exchange-traded product.
Assets in the SPDR shrank to 856.71 metric tons yesterday, the least since February 2009, and have contracted 37 percent this year. Nineteen analysts surveyed by Bloomberg News expect prices to drop next week, nine are bullish and three neutral, the largest proportion of bears since June 21.
Spot silver gained 0.2 percent to $20.0115 an ounce, extending a rebound from yesterday’s low of $19.7342, which was the lowest since Aug. 8. The metal is still heading for a fourth weekly decline in the longest such run since April.
Platinum rose as much as 0.3 percent to $1,396.08 an ounce and was at $1,394.20. Prices are heading for a third weekly loss and touched $1,388.54 yesterday, the lowest since Oct. 16. Palladium was little changed at $714.50 an ounce, set for a second weekly decrease.
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