Gold Trades Below 1-Week High as Fed Outlook Considered

Gold traded below the highest price in more than a week in London as investors weighed the outlook for U.S. policy makers to continue reducing stimulus before raising interest rates.

Data released April 4 showed the U.S. economy added 192,000 jobs in March, compared with a 200,000 increase estimated by economists in a Bloomberg News survey. Gold climbed 1.3 percent that day, the most since March 12, reaching $1,306.84 an ounce, the highest since March 27.

Federal Reserve Chair Janet Yellen said last week that slack in labor markets showed accommodative policies will still be needed for some time, after signaling last month the Fed may end bond purchases in the second half of 2014 and increase rates six months after that.

“While the recent U.S. payroll data was just below forecasts, we believe the Federal Reserve will continue to scale back stimulus,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “With safe-haven demand risks weakening and the U.S. economy seemingly on track again, we anticipate the gold price to begin tracking lower.”

Bullion for immediate delivery fell 0.3 percent to $1,299.68 by 9:01 a.m. in London, according to Bloomberg generic pricing. Gold for June delivery lost 0.3 percent to $1,299.90 on the Comex in New York. Futures trading volume was 47 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

Fed Policy

The Fed, which next meets at the end of the month, cut monthly bond-buying by $10 billion at each of the past three gatherings, leaving purchases at $55 billion. The minutes from the March meeting are due for release on April 9.

Gold rose 8.2 percent this year, rallying from the biggest annual decline since 1981. Holdings in gold-backed exchange-traded products declined 15.3 metric tons last week, the most since December, data compiled by Bloomberg show. Assets fell to 1,750.5 tons, the lowest since March 5.

Silver for immediate delivery declined 0.7 percent to $19.8206 an ounce in London. Platinum fell 0.8 percent to $1,438.50 an ounce. Palladium lost 0.6 percent to $786 an ounce. Prices climbed to $801.53 on March 24, the highest since August 2011. Platinum and palladium had both gained the previous six sessions.

The National Union of Metalworkers, South Africa’s largest labor organization, said on April 4 it’s accepting miners who have started to turn to it as a strike at the world’s biggest platinum mines drags on for an 11th week. Members of the Association of Mineworkers and Construction Union have been on strike since Jan. 23.

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To contact the editors responsible for this story: Claudia Carpenter at Sharon Lindores, Nicholas Larkin

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