Sept. 24 (Bloomberg) -- Gold fell for the third straight session on concern that the Federal Reserve will slow the pace of U.S. fiscal stimulus, eroding demand for the metal as a store of value.
Fed Bank of St. Louis President James Bullard said on Sept. 20 that tapering may start in October after the U.S. central bank unexpectedly refrained last week from reducing monthly bond purchases of $85 billion. Twenty-four of 41 economists surveyed by Bloomberg News last week said the Fed will scale back stimulus in December.
“It’s clear that tapering will begin over the next few months, and that makes gold less precious,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview.
Gold futures for December delivery fell 0.8 percent to close at $1,316.30 an ounce at 1:47 p.m. on the Comex in New York. The metal dropped 3.1 percent in the previous two sessions.
Futures have slumped 21 percent this year after some investors lost faith in the metal as an alternative investment amid a U.S. equity rally and low inflation.
Gold surged 70 percent from the end of December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system by purchasing debt.
Silver futures for December delivery declined 1.2 percent to $21.586 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery fell 0.5 percent to $1,418.80 an ounce. Trading almost doubled compared with the average in the past 100 days, according to data compiled by Bloomberg.
Palladium futures for December delivery rose 0.3 percent to $720 an ounce.
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