Jan. 22 (Bloomberg) -- Gold declined for the second straight day in New York amid concern that the Federal Reserve will continue lowering U.S. stimulus, reducing the demand for the metal as a store of value.
The Fed trimmed its monthly bond purchases to $75 billion from $85 billion in December, and will probably cut buying by $10 billion at each meeting to end the program this year, according to a Jan. 10 Bloomberg survey. The central bank next gathers Jan. 28-29. Gold fell 0.8 percent yesterday, the most since Dec. 30. Morgan Stanley today lowered its target for prices this year by 12 percent to $1,160 an ounce.
“The market will trade sideways to lower ahead of the Fed meeting,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “The overall trend remains bearish.”
Gold futures for February delivery lost 0.3 percent to settle at $1,238.60 on the Comex at 1:44 p.m. in New York. Prices slumped 28 percent last year, the most since 1981. Some investors lost faith in the metal as a store of value amid a rally in equities and low inflation.
Platinum futures for April delivery climbed 0.6 percent to $1,462.40 an ounce on the New York Mercantile Exchange. An ounce of the metal bought as much as 1.18 ounces of gold in London today, the most since June 2011.
At least 70,000 members of the Association of Mineworkers and Construction Union, the largest labor group at platinum operations in South Africa, are preparing to strike over pay tomorrow. The country has the world’s biggest reserves of the metal.
Impala Platinum Holdings Ltd. is idling operations in Rustenburg, South Africa, tonight as a safety precaution before the start of the strike, Johan Theron, spokesman for the world’s second-biggest producer, said by telephone today.
Palladium futures for March delivery rose 0.1 percent to $748.85 an ounce on the Nymex. Silver futures for delivery in March fell 0.2 percent to $19.839 an ounce on the Comex.
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