BLBG: Gold Falls to Lowest in More Than Two Weeks on Stimulus Outlook
Gold declined to the lowest price in more than two weeks in New York on speculation the Federal Reserve will curb stimulus as the U.S. economy strengthens. Palladium retreated from a two-month high.
Standard & Poor’s lifted its outlook for the U.S.’s AA+ credit rating yesterday to stable from negative, citing receding fiscal risks. Federal Reserve Chairman Ben S. Bernanke said last month the central bank could curtail its $85 billion monthly bond purchases if the economy improves. Chinese markets remain closed today and tomorrow for holidays.
“Upbeat sentiment over the U.S. economic outlook continues to feed concerns of increasing U.S. yields and an easing pace to QE3,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote in a report, referring to quantitative easing. “Volumes in Asia will be subdued due to holidays in China.”
Gold for August delivery slid 0.8 percent to $1,374.80 an ounce by 7:55 a.m. on the Comex in New York. Prices fell to $1,365.80, the lowest level since May 23. Futures trading volume was about the average in the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London dropped 0.8 percent to $1,375.45.
Gold Volatility
Gold’s 60-day historical volatility was at 28.8 percent today, the highest since December 2011, according to data compiled by Bloomberg.
Gold fell 2.3 percent on June 7 after data showed U.S. payrolls increased more than forecast in May. Prices slid 18 percent this year as an improving U.S. economy increased speculation the Fed may scale back quantitative-easing measures that helped bullion cap a 12-year bull run in 2012. Newcrest Mining Ltd. (NCM), Australia’s largest gold producer, said last week it will write down the value of its assets by as much as A$6 billion ($5.6 billion) after the slump in prices.
Holdings in exchange-traded products fell 6.1 metric tons to 2,129.8 tons yesterday, the lowest since April 2011, according to data compiled by Bloomberg. Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, expanded yesterday for the first time since May 29, the company’s website showed.
Silver for July delivery fell 1.5 percent to $21.59 an ounce in New York. Platinum for July delivery lost 0.9 percent to $1,493.50 an ounce. Palladium for September delivery was 0.8 percent lower at $763.55 an ounce, after reaching $772.50 yesterday, the highest since April 3.
To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
