Gold fell as investors reduced their holdings in bullion-backed exchange-traded products to the lowest level since 2009.
Bullion for immediate delivery lost 0.3 percent to $1,189.98 an ounce by 3:19 p.m. in Singapore after reaching an intraday high of $1,195.57, Bloomberg generic pricing shows.
Investors have trimmed their assets in gold-backed funds as surging stock markets from the U.S. to China hurt demand and prospects for rising U.S. interest rates boosted the dollar. The metal has added 0.5 percent this year as traders digested U.S. data and policy makers’ remarks to gauge when the Fed will raise borrowing costs. There is value to “watchful waiting” while additional data clarify the economy’s momentum, Fed Reserve Governor Lael Brainard said Tuesday.
“Prices are likely to remain sensitive to monetary policy expectations,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Expectations for a delay in liftoff of rates would be interpreted as positive for gold.”
Brainard’s comments contrast with a May 22 speech by Fed Chair Janet Yellen, who said she expected the economy to improve after first-quarter weakness, making a rate increase appropriate this year. Officials have said they need to see more improvement in the labor market, and be reasonably certain inflation will move back toward the Fed’s 2 percent goal.
Investors sold gold in exchange-traded products for a fifth day, cutting assets by 0.3 percent to 1,594.08 metric tons as of Tuesday, according to data compiled by Bloomberg.
Gold for August delivery fell 0.3 percent to $1,190.30 an ounce on the Comex. Bullion of 99.99 percent purity was at 237.45 yuan a gram ($1,191.77 an ounce) on the Shanghai Gold Exchange from 237.40 yuan on Tuesday.
Silver for immediate delivery slid 0.5 percent to $16.7095 an ounce from $16.7995 on Tuesday, when prices capped three days of gains. Platinum traded at $1,112.17 an ounce, while palladium was at $765.96 an ounce.