Gold fell for the first time in three days, cutting a weekly gain, as a rally following the Federal Reserve’s decision to hold stimulus curbed physical demand and as data showed signs the U.S. economy is improving. Bullion jumped 4.1 percent on Sept. 18, the most in 15 months, after the Fed said it wants more evidence of an economic recovery before curbing its $85 billion-a-month of bond buying. Economists surveyed by Bloomberg expected Fed policy makers to reduce monthly Treasury purchases by $5 billion after this week’s meeting. Gold fell 19 percent this year as some investors lost faith in the metal as a store of value on optimism economies are strengthening. Reports released yesterday showed sales of previously owned U.S. homes unexpectedly rose in August to the highest in more than six years and manufacturing in the Philadelphia region expanded in September at the fastest pace since March 2011. Holdings in gold-backed funds are at the lowest in three years, data compiled by Bloomberg show. “Physical demand has really slowed� after prices climbed, Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “There will be quantitative-easing tapering at some point.� Gold for immediate delivery fell 0.7 percent to $1,356.45 an ounce by 9:39 a.m. in London. Prices gained 2.3 percent this week. Bullion for December delivery slid 1 percent to $1,356 on the Comex in New York. Futures trading volume was 20 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. ETP Holdings “Bullion was weighed down by the release of better-than-expected U.S. economic data,� Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The Fed tapering decision is no longer a surprise and we wonder how much more traction the gold market can get from the Fed decision.� Holdings in gold-backed exchange-traded products fell 2.1 metric tons yesterday to 1,935.1 tons, the lowest since May 2010, data compiled by Bloomberg shows. Silver for immediate delivery fell 1.8 percent to $22.6472 an ounce in London, cutting its weekly gain to 1.9 percent, the most in four weeks. Platinum slipped 0.7 percent to $1,453.75 an ounce. Palladium declined 1.4 percent to $724 an ounce. To contact the reporters on 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

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