Sept. 5 (Bloomberg) -- Gold futures declined for the first time in three sessions as a European Central Bank plan to buy bonds as part of an economic-stimulus program lowered demand for the precious metal as a hedge against inflation.
The ECB was said to propose unlimited government-debt purchases that will be sterilized, ensuring a neutral impact on the money supply by removing funds from elsewhere in the banking system. Yesterday, gold reached $1,701.60 an ounce, the highest since March 13.
“The word ‘sterilized’ is bearish for gold,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “There is some profit-taking too.”
Gold futures for December delivery fell 0.1 percent to settle at $1,694 at 1:41 p.m. on the Comex in New York. The commodity gained 2.3 percent in the previous two sessions.
In August, the metal jumped 4.5 percent, the most since January, on speculation that the Federal Reserve and ECB will increase steps to bolster their economies.
Silver futures for December delivery slid 0.3 percent to $32.329 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery advanced 0.5 percent to $1,575.60 an ounce, the third straight gain. Palladium futures for December delivery rose 0.9 percent to $646.95 an ounce.
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