Gold Trades Near 4-Month Low as Iran Accord Damps Haven Appeal

Gold traded near a four-month low as the accord between Iran and world powers damped demand for haven assets, while holdings in exchange-traded products extended declines. Silver sank to the lowest in more than 15 weeks.

Bullion for immediate delivery dropped as much as 0.5 percent to $1,237.45 an ounce, and traded at $1,243.36 at 9:19 a.m. in Singapore. Prices fell to $1,236.88 on Nov. 21, the lowest since July 9. Silver decreased as much as 0.9 percent to $19.6969 an ounce, the lowest since Aug. 8.

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, shrank to 852.21 metric tons on Nov. 22, the least since January 2009, and have contracted 37 percent in 2013. Gold tumbled 26 percent this year after a 12-year rally as investors sold metal from ETFs at a record pace on expectations that the Federal Reserve will start to cut its $85 billion-a-month of bond buying and as inflation fails to pick up.

“A lot of the risk premium, the safe haven status that gold has, the reason that people bought gold is not there,” Jonathan Barratt, chief executive officer of Barratt’s Bulletin, said on Bloomberg Television’s “First Up”. “You can certainly see that in developments in the Middle East as well. We’re losing a lot of the riskier concerns out there and as a result, many people are revising their portfolio. It’s evidenced by the draw in the ETF market.”

Iran agreed to curtail its nuclear activities and in return won an easing of “certain sanctions” on oil, auto parts, gold and precious metals. The deal, which is reversible, was announced yesterday after five days of talks in Geneva.

Gold for February delivery on the Comex in New York slid as much as 0.6 percent to $1,237.20 an ounce, before trading at $1,243.40, in trading that was 190 percent above the average volume for the past 100 days at this time.

Spot silver traded 0.2 percent lower at $19.8269 an ounce, dropping for a second day. Platinum was little changed at $1,386.15 an ounce, while palladium fell 0.1 percent to $714.34 an ounce.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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