Gold held below $1,300 an ounce as investors weighed the outlook for U.S. monetary stimulus against unrest in Ukraine. Assets in exchange-traded funds backed by platinum and palladium climbed to records.
Gold fell 28 percent last year on expectations the Federal Reserve will reduce bond purchases as the economy improves. Prices rebounded 7.6 percent this year partly on tension between Ukraine and Russia. It’s Memorial Day in the U.S.
“There isn’t much incentive for people to buy gold at the moment,” said Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou, China-based company that bought Natixis Commodity Markets Ltd. “Trading is expected to be lackluster with the U.S. holiday, with no economic data to look forward to. Ukraine continues to offer background support.”
Gold for immediate delivery dropped 6 cents, or less than 0.1 percent, to $1,292.55 an ounce today in London, according to Bloomberg generic pricing. Prices dropped 0.1 percent on May 23 after sales of new homes in the U.S. increased the most since October.
Futures for August delivery rose 0.1 percent to $1,292.70 an ounce on the Comex in New York. Investors cut their net-long positions on gold for a second week to 90,358 contracts in the week ended May 20, U.S. Commodity Futures Trading Commission data show.
Kazakhstan, Turkey and Belarus expanded gold reserves in April as Mexico cut holdings, according to data on the International Monetary Fund website.
Holdings in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, were unchanged on May 23 after falling to 776.89 metric tons on May 21, the lowest since December 2008.
Silver futures were little changed at $19.425 an ounce, platinum rose 0.6 percent to $1,481.20 an ounce and palladium climbed 0.3 percent to $834.30 an ounce. On May 23, assets in platinum-backed ETPs expanded to 85.62 tons and those in palladium-backed ETPs increased to 86.93 tons.
Representatives from the three biggest platinum producers and the main union at their South African mines are seeking to end a strike that’s curbed output for 18 weeks. South Africa is the world’s largest platinum producer and second-biggest palladium producer.