Gold Declines Second Time in Three Sessions Ahead of Fed Meeting
Gold futures declined for the second time in three sessions as investors awaited the start of the Federal Reserve’s two day policy meeting.
Gold has risen 8.3 percent in July, set for the biggest monthly gain since January 2012. Fed Chairman Ben S. Bernanke said this month that it’s too early to decide whether to begin scaling back debt purchases in September, after saying on June 19 that bond buying could slow if the economy improves. Home prices in the U.S. rose in May by the most in more than seven years, a report showed today in New York.
“We are seeing some nervousness in the market before we hear from the Fed tomorrow,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Strong housing data got people more worried about tapering.”
Gold futures for December delivery fell 0.4 percent to settle at $1,324.80 an ounce at 1:44 p.m. on the Comex in New York. Prices tumbled 21 percent this year after some investors lost faith in the metal as a store of value and on speculation the Fed may curb its bond-buying program.
The slump this year hurt investors from billionaire John Paulson to producers already contending with rising costs. African Barrick Gold Plc (ABG), a producer of gold in Tanzania, said today it wrote down the value of its mines by $727 million and will reduce costs.
Silver futures for September delivery dropped 0.9 percent to $19.68 an ounce in New York.
Trading was 42 percent lower than average for the past 100 days for this time of day, according to data compiled by Bloomberg.
On the New York Mercantile Exchange, platinum futures for October delivery slipped 0.4 percent to $1,437.50 an ounce, the third drop in four sessions.
Palladium futures for September delivery declined 2.1 percent to $728.65 an ounce.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org