Gold fell for a second day as equities advanced, lowering the demand for the precious metal as an alternative investment.
The Standard & Poor’s 500 Index gained the most in more than a week. The Federal Reserve will probably cut bond buying to $45 billion at the meeting that starts today, estimates compiled by Bloomberg showed. Gold slumped 28 percent last year as equities surged and amid concern that the U.S. central bank will slow the pace of stimulus.
“The equities continue to impact gold prices,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “Also, people are waiting to hear from the Fed.”
Gold futures for June delivery fell 0.2 percent to settle at $1,296.30 an ounce at 1:43 p.m. on the Comex in New York. Yesterday, the metal lost 0.1 percent. Trading was 28 percent lower than the average for the past 100 days for this time, according to data compiled by Bloomberg.
Bullion has risen 1 percent this month as the tension between Russia and Ukraine boosted haven appeal of the metal.
“For now, risk trade is back on,” Naeem Aslam, chief market analyst at Ava Capital Markets Ltd. in Dublin, said in a report today. “Gold is under pressure once again as the rewards are bigger for traders to invest that money in the equity markets.”
The metal jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut interest rates to a record in a bid to boost the economy.
Silver futures for July delivery declined 0.4 percent to $19.538 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for July delivery rose 0.8 percent to $1,431.40 an ounce. Palladium futures for June delivery climbed 0.9 percent to $807.90 an ounce. The metal has jumped 12 percent this year, partly as tensions in Ukraine spurred the U.S. and Europe to impose sanctions against Russia, the world’s biggest producer.