BLBG:Gold Seen Falling in London Before Federal Reserve’s Decision
Gold may drop for a second day in London as investors wait for the Federal Reserve’s decision on monetary policy.
The central bank decides whether to add further stimulus when it concludes a two-day meeting today. Gold jumped 2.1 percent on Sept. 7 on speculation of more stimulus after U.S. jobs growth slowed in August. European Central Bank Governing Council member Panicos Demetriades said the ECB might not have to spend a cent on government bonds.
“People have priced in quantitative easing and the disappointment factor is very high,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “If this quantitative easing does not materialize, you’d surely see prices fall.”
Gold for immediate delivery dropped less than 0.1 percent to $1,730.32 an ounce by 10:14 a.m. in London. The futures for December delivery fell 0.1 percent to $1,732.70 an ounce.
The one-month interest rate to lend gold in exchange for dollars was a negative 0.13 percent today, the lowest since April and compared with a negative 0.12 percent yesterday, accoreding to data on Bloomberg. The lease rate is derived by subtracting the gold forward offered rate from the London Interbank Offered Rate. A negative reading means banks have to pay to have their gold deposits lent.
Gold has climbed 11 percent this year as slowing economic growth boosted demand for assets other than stocks or bonds. Holdings in bullion-backed exchange-traded products expanded to a record 2,489.1 metric tons yesterday, data compiled by Bloomberg show.
Silver dropped 0.6 percent to $33.07 an ounce and platinum was up 0.1 percent at $1,648.50 an ounce after jumping 2.6 percent yesterday on labor unrest in South Africa, the world’s largest producer of the metal. Platinum has climbed 10 days in a row, the longest streak since Aug. 22, 2011. Palladium was unchanged at $678 an ounce.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
