Aug. 6 (Bloomberg) -- Gold futures tumbled, capping the longest slump in 11 weeks, on speculation that the Federal Reserve will scale back U.S. bond purchases.
Fed Bank of Chicago President Charles Evans, who has backed monetary stimulus, said today that the labor market showed “good improvement.” He indicated a cut in debt purchases may begin in September. In July, gold rose 7.3 percent, the most since January 2012, after Fed Chairman Ben S. Bernanke said that it’s too early to decide whether to pare asset buying next month.
“The downward pressure in gold is testament to the belief that tapering is likely to start sooner rather than later,” Carlos Perez-Santalla, a New York-based broker at Marex North America LLC, said in a telephone interview. “The mood is very bearish.”
Gold futures for December delivery fell 1.5 percent to settle at $1,282.50 an ounce at 1:41 p.m. on the Comex in New York, the biggest drop for a most-active contract since July 5. Earlier, the price touched $1,278.10, the lowest since July 18. The commodity declined for the sixth straight session, the longest slump since mid-May.
Futures have fallen 23 percent this year as some investors lost faith in gold as a store of value amid an equity rally and low inflation.
Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, have slumped 32 percent in 2013 to the lowest since February 2009.
Silver futures for September delivery declined 1 percent to $19.523 an ounce on the Comex, the biggest drop since July 26. Trading was 28 percent below the average in the past 100 days, according to data compiled by Bloomberg. The price has tumbled 35 percent this year.
On the New York Mercantile Exchange, platinum futures for October delivery dropped 1.4 percent to $1,427.80 an ounce, the biggest decline since July 26.
Palladium futures for September delivery fell 1.7 percent to $722.80 an ounce, the lowest settlement since July 11.
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