Gold may decline in New York as speculation that inflation is easing curbs demand for the metal as a hedge against rising consumer prices. Federal Reserve Bank of St. Louis President James Bullard said in an interview in New York that the central bank may keep its monetary policy unchanged until late this year, and that declining inflation expectations have lessened the need to begin withdrawing record stimulus. Gold futures have declined 5.4 percent since reaching a record earlier this month. “Inflation expectations have been easing lately a bit,” Dan Smith, an analyst at Standard Chartered Plc in London, said today by phone. “Gold is looking for another reason to break higher. It lacks a trigger.” Gold for June delivery fell $3.30, or 0.2 percent, to $1,492.50 an ounce by 7:58 a.m. on the Comex in New York. Immediate-delivery gold was 0.3 percent lower at $1,492.10 in London. The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of traders’ expectations for inflation, has dropped from 2.67 percentage points on April 11 to 2.36 percentage points today. While Fed policy makers neared agreement on the sequence of tools they will use to withdraw record monetary stimulus, they said talks about the exit strategy don’t mean that tightening “would necessarily begin soon.” The Fed should first end its policy of reinvesting proceeds from maturing securities and later raise interest rates and sell assets, majorities of policy makers said at their April 26-27 meeting, according to minutes released yesterday. Gold’s Record Concern about inflation, Europe’s debt crisis, a weakening dollar and fighting in Libya boosted gold to a record $1,577.40 on May 2. Prices are up 5 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. European Central Bank officials yesterday ruled out a Greek debt restructuring, clashing with political leaders over a solution to the crisis. Luxembourg Prime Minister Jean-Claude Juncker this week proposed the “reprofiling” of Greek maturities, damping concern that private bond holders will be forced to absorb losses. European governments have thus far favored taxpayer-funded bailouts to stamp out the region’s sovereign-debt woes. China Jewelry Demand Gold demand gained 11 percent to 981.3 metric tons in the first quarter from a year earlier, the World Gold Council said today. Jewelry usage in China, the second-biggest buyer after India, climbed 21 percent to a record in the quarter, and the country’s consumption of the metal may double before 2020, the London-based industry group said. Silver for July delivery gained 0.9 percent to $35.43 an ounce in New York. Palladium for June delivery was down 0.4 percent at $734.05 an ounce. Platinum for July delivery declined 0.3 percent to $1,775.30 an ounce. Platinum held in exchange-traded products fell 0.46 ton, or 1.1 percent, to a five-week low of 42.38 tons yesterday, data compiled by Bloomberg show. Palladium holdings declined 1.2 tons, or 1.8 percent, to 66.09 tons. That’s the lowest level since December. 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

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