BLBG:Gold Declines From One-Week High on Economic Recovery Outlook
Gold declined from a one-week high in New York on speculation that improving economic growth may curb demand for a protection of wealth.
The U.S. Federal Reserve will today release minutes of its March policy meeting, when it signaled it would continue asset purchases to bolster growth. Goldman Sachs Group Inc. cut its gold forecasts through 2014 and said the turn in the price cycle is accelerating as the U.S. economy strengthens. Global equities reached a three-week high today and are less than 1 percent below the highest level since June 2008.
“I can’t see the Fed changing its mind overnight, but the expectation is that the U.S. doesn’t need any fresh quantitative easing,” James Moore, an analyst at FastMarkets Ltd. in London, said today by phone. “Investors are looking at risk and the safe-haven role that gold has fulfilled is no longer required.”
Gold futures for June delivery fell 0.4 percent to $1,579.90 an ounce by 7:40 a.m. on the Comex in New York. Prices reached $1,590.10 yesterday, the highest since April 2. Futures trading volume was 21 percent below the average in the past 100 days for this time of day. Gold for immediate delivery declined 0.3 percent to $1,580.40 in London.
Bullion is down 5.7 percent this year after 12 straight annual gains. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, fell to 1,200.4 metric tons yesterday, the least since June 2011, data on its website show. Goldman cut its three-month target to $1,530 from $1,615 and lowered its 12-month forecast to $1,390 from $1,550, it said today in a report.
The Fed is buying $85 billion of debt a month and has said further improvement in the U.S. labor market is needed for the central bank to consider reducing its record monetary easing. Bank of Japan (8301) policy makers said April 4 they would boost monthly debt purchases. Gold priced in yen is up 8.2 percent this year and reached the highest since March 1980 today.
Silver for May delivery fell 0.8 percent to $27.655 an ounce in New York, after jumping 2.7 percent yesterday, the most since Jan. 30. Palladium for June delivery slid 2.2 percent to $716.85 an ounce, reaching $714.75, the lowest since March 4. Platinum for July delivery was 1.1 percent lower at $1,536.70 an ounce.
To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
