BLBG:Gold Poised To Drop For Third Day As Fed May Hold Off Stimulus
Gold may decline for a third day on speculation that the Federal Reserve may hold off announcing additional stimulus at the end of its policy meeting today, damping demand for bullion as a store of value.
Spot gold was little changed at $1,614.70 an ounce at 1:12 p.m. in Singapore after capping a second month of gains yesterday. December-delivery bullion rose 0.2 percent to $1,618 an ounce on the Comex in New York.
The Federal Open Market Committee ends a two-day meeting today, while the European Central Bank convenes tomorrow. Cash gold rose 1.1 percent in July and 2.4 percent the previous month on optimism that central banks around the world will take more steps to prop up economies as Europe’s debt crisis hurts growth. Eighty-eight percent of economists surveyed by Bloomberg News say the Fed will refrain from starting new purchases this week.
“Gold’s near-term fortunes are tied to central banks’ actions,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of China’s largest state-owned investment group. “As long as investors hold on to the possibility of further monetary easing, whether in the U.S. or Europe or China, any decline in prices will be limited.”
Gold rallied to a six-week high of $1,629.35 on July 27 after ECB President Mario Draghi pledged to do whatever it takes to preserve the euro. Bullion holdings in exchange-traded products expanded the most in six weeks yesterday, climbing 4.78 metric tons to 2,395.38 tons, data compiled by Bloomberg showed.
Spot silver was little changed at $28.0025 an ounce after losing 0.7 percent yesterday. Cash platinum fell as much as 0.7 percent $1,406 an ounce, and traded at $1,412.75. Palladium was also little changed at $589.25 an ounce after five days of gains, the best run since January.
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
