Gold dropped for the first time in four days as some investors sold the metal after prices climbed to a one-week high amid speculation the U.S. Federal Reserve will expand monetary stimulus to boost the economy. Spot gold fell as much as 0.4 percent to $1,706.95 an ounce before trading at $1,709.25 at 2:58 p.m. in Singapore. Bullion rallied to $1,717.36 yesterday, the most expensive since Dec. 3, as the dollar weakened. The Federal Open Market Committee meets today and tomorrow for the last time this year. The Fed may consider expanding purchases of assets after its so-called Operation Twist of swapping $45 billion a month in short-term Treasuries for long- term debt expires this month. Gold increased 9.3 percent this year as investors sought a haven from weakening currencies after central banks around the world took steps to spur growth. “Much will hinge on the FOMC and its decision on what to do once Operation Twist comes to an end,� Nick Trevethan, a senior commodities strategist at Australia & New Zealand Banking Group Ltd., wrote in a note today. “Momentum is on the side of the market. The next test for gold will be whether it can break $1,721 resistance.� Gold for February delivery slipped 0.2 percent to $1,710.80 an ounce on the Comex in New York. Holdings in exchange-traded products, up 12 percent this year, expanded to a record 2,629.315 metric tons yesterday, data compiled by Bloomberg show. Cash silver fell 0.6 percent to $33.075 an ounce, also dropping for the first time in four days. The metal climbed to a one-week high of $33.435 an ounce yesterday. Spot platinum declined 0.2 percent to $1,620.25 an ounce, snapping a three-day advance. The metal rallied to $1,627.32 an ounce yesterday, the highest price since Oct. 19. Palladium dropped 0.4 percent to $699 an ounce after climbing to $705 yesterday, the highest since Sept. 14. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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