Gold fell in New York as Russia’s bid to get Syria to put its chemical weapons under international control cut demand for a protection of wealth. Silver dropped and palladium traded near a two-month low. Bullion futures reached a three-month high of $1,434 an ounce on Aug. 28 amid concern the U.S. will attack Syria for its alleged use of chemical weapons against civilians. Syria accepted Russia’s proposal on its weapons, Syrian Foreign Minister Walid al-Muallem said today during a trip to Moscow. Gold fell 19 percent this year as some investors lost faith in the metal as a store of value and on speculation the Federal Reserve will curb stimulus. Fed policy makers will cut monthly debt purchases by $10 billion at the Sept. 17-18 meeting, a Sept. 6 Bloomberg News survey showed, even after data that day showed fewer U.S. jobs were added than estimated in August. “Due to the fading of geopolitical tensions, gold prices are expected to decline,� analysts at Hyderabad, India-based Karvy Comtrade Ltd. wrote today in a report. “A tapering of quantitative easing by the Fed is also a concern. Gold prices might remain under pressure.� Gold for December delivery slid 1.5 percent to $1,366.40 by 7:48 a.m. on the Comex in New York. Futures trading volume was 24 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery in London dropped 1.4 percent to $1,367.31. Syria Outlook While questioning whether Syrian President Bashar al-Assad would yield control of his weapons stocks, U.S. President Barack Obama said on ABC News that an attack “absolutely� would be put on hold if Syria followed through on the Russian proposal. Obama will make a televised address today to make the case that U.S. security is at stake if the Syrian regime’s alleged use of chemical weapons goes unanswered. “Yesterday we had a round of very fruitful negotiations with Foreign Minister Sergei Lavrov and he proposed an initiative concerning chemical weapons,� al-Muallem said, referring to his Russian counterpart. “And already by the evening we agreed to the Russian initiative.� Holdings in gold-backed exchange-traded products declined 2.9 metric tons yesterday to 1,950.8 tons, data compiled by Bloomberg show. They’ve added 3.9 tons since reaching a three-year low on Aug. 8. Silver for December delivery fell 1.9 percent to $23.27 an ounce in New York. Platinum for October delivery lost 0.5 percent to $1,475.60 an ounce. Palladium for December delivery was 0.6 percent higher at $687.10 an ounce. It reached $682.25 yesterday, the lowest level since July 8. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Source