BLBG:Gold Sinks to Three-Week Low as Silver Declines on Taper Bets
Gold retreated to a three-week low on speculation that the U.S. Federal Reserve will commit to reducing stimulus next week. Silver fell, while platinum declined to the lowest in a month.
Gold for immediate delivery dropped as much as 0.8 percent to $1,354.51 an ounce, the lowest level since Aug. 20, and traded at $1,358.42 at 2:07 p.m. in Singapore. Bullion for December delivery lost as much as 0.7 percent to $1,353.80 an ounce on the Comex in New York, also the lowest since Aug. 20.
Gold has declined 19 percent this year amid expectations that the Fed will pare its $85 billion a month of bond-buying as the economy improves. While data today may show U.S. jobless claims rose for the first time in three weeks, a Bloomberg survey on Sept. 6 showed that the central bank will taper its quantitative easing by $10 billion at the Sept. 17-18 meeting. The U.S. and Russia meet today to discuss a plan for Syria to surrender its chemical weapons, averting a military strike.
“As geopolitical risks fade, the focus is shifting back to QE and the Fed meeting next week, and we expect the market to remain volatile till then,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Although an immediate strike is unlikely, the market will continue reacting to headlines on Syria.”
Geneva Meeting
Gold reached a three-month high last month as tension in the Middle East escalated and oil rallied. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov will meet in Geneva to discuss the crisis after President Barack Obama delayed a Congressional vote sanctioning military action.
Global gold demand will fall to 2,237 tons in the second half from 2,309 tons in the same period a year earlier and 2,533 tons in the first six months as bar buying drops from a record and central banks add less, Thomson Reuters GFMS said.
Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, were unchanged for a second day at 917.13 metric tons yesterday.
Silver for immediate delivery fell as much as 1.4 percent to $22.873 an ounce, before trading at $22.9695. Prices dropped to $22.7739 yesterday, the lowest since Aug. 22.
Platinum lost as much as 0.5 percent to $1,466.40 an ounce, the lowest since Aug. 8, and was last at $1,471.21. Palladium decreased 0.4 percent to $689.95 an ounce.
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
