BLBG:Gold Swings Between Gains and Declines Amid Stimulus Speculation
Gold swung between gains and losses in London amid speculation the U.S. Federal Reserve will maintain stimulus while investment demand wanes for the precious metal as a haven.
Gold retreated 22 percent this year and is set to halt a 12-year bull run amid speculation the U.S. central bank may scale back stimulus. The Fed said last week it would maintain its $85 billion monthly bond-buying program. Hedge funds cut their bullish position in gold last week for the first time in five weeks, U.S. Commodity Futures Trading Commission data show.
“There is little reason to anticipate a breakout in gold prices in either direction, given the current lack of consensus in market direction,” Adam Longson, an analyst with Morgan Stanley in New York, said in an e-mailed report today. Bullion may trade between $1,200 and $1,350 an ounce “until the Fed provides further clarity over its asset-purchasing program.”
Gold for immediate delivery was little changed at $1,311.92 an ounce at 11:10 a.m. in London after adding as much as 0.7 percent and slipping as much as 0.1 percent. Gold for delivery in December was little changed at $1,311 on the Comex in New York.
Fifty percent of the 54 economists in a Bloomberg survey last month expected the Fed to decide to pare bond purchases in September. Fed Bank of St. Louis President James Bullard, who backed last week’s decision to continue buying, said Aug. 2 policy makers should wait for evidence the labor market and economy are strengthening before tapering.
Money managers cut their net-long gold position by 6.5 percent to 65,517 Comex futures and options by July 30, according to the CFTC. Holdings of short contracts, or bets on a decline, rose 6.8 percent, the most in six weeks.
Silver for immediate delivery fell 0.1 percent to $19.8815 an ounce in London. Platinum increased 0.5 percent to $1,453.55 an ounce and palladium advanced 0.2 percent to $731.45 an ounce.
To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
