Gold Heads for Worst Monthly Performance Since June on Tapering

Gold headed for a third monthly loss on speculation that the Federal Reserve will begin reducing monetary stimulus as the U.S. economy strengthens, damping demand for haven assets.

Bullion for immediate delivery traded at $1,242.65 an ounce by 12:55 p.m. in Singapore from $1,244.13 yesterday, when the metal rose 0.5 percent. Gold is down 6.1 percent in November, the worst performance since June, when prices touched a 34-month low of $1,180.50, and is little changed this week.

Gold lost 26 percent this year as an improving U.S. economy fueled speculation the Fed will start scaling back its $85 billion of monthly asset purchases that drove a 12th year of gains in 2012. Eighteen analysts surveyed by Bloomberg News expect prices to fall next week, nine are bullish and three neutral, as respondents remained bearish for a second week.

“Gold prices continue to be dictated by U.S. economic data and monetary policy,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “Physical demand, especially in Asia, is not bad as we approach the year-end and prices decline.”

China’s net gold imports from Hong Kong were 129.9 tons last month, the second-highest level on record, data this week showed. Volumes for bullion of 99.99 percent purity on the Shanghai Gold Exchange climbed to 18,521 kilograms yesterday, the most since Oct. 8.

Improving Economy

U.S. data this week showed jobless claims unexpectedly fell and leading economic indicators rose for a fourth month. Fed minutes released on Nov. 20 signaled that policy makers expected an improving economy to warrant trimming debt purchases in coming months.

Gold for February delivery on the Comex in New York traded at $1,242.30 an ounce from $1,237.90 on Nov. 27. U.S. markets were closed for Thanksgiving and yesterday’s transactions will be booked with today’s trades for settlement purposes.

Spot silver rose 0.2 percent to $19.7703 an ounce, extending yesterday’s 0.3 percent gain. The metal is set for a fifth weekly decline, the longest run since April, and has dropped 9.8 percent this month, the largest decrease since June.

Platinum, which touched the lowest since July 8 yesterday, rose 0.2 percent to $1,364.53 an ounce, set for a weekly and a monthly loss. Palladium was little changed at $721.95 an ounce, poised to snap two months of gains.

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