BLBG:Gold Falls for 4th Day in London on Signs of U.S. Pickup
Gold fell for a fourth straight day in London, the worst run in a month, as investors assessed prospects for reduced stimulus in the U.S.
The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, reached a seven-week high before U.S. data that may signal growth in factory output. Bullion fell from a three-month high of $1,433.83 on Aug. 28 on signs a U.S. strike against Syria will be delayed.
Gold rebounded from a 34-month low of $1,180.50 in June as lower prices boosted demand for jewelry, bars and coins in Asia. The metal is still down 17 percent this year as some investors lost faith in gold as a store of value and on speculation the Federal Reserve will slow stimulus. Economists surveyed by Bloomberg expect a Labor Department report will say on Sept. 6 that U.S. payrolls growth accelerated last month.
“Market participants may be squaring up positions ahead of the key August non-farm payrolls report,” analysts at Edelweiss Comtrade Ltd. said today in a report. “Weighing on gold price is lower safe-haven demand as fear ebbed about an imminent strike on Syria.”
Gold for immediate delivery fell 0.3 percent to $1,387.45 an ounce by 9:25 a.m. in London. It reached $1,373.38 yesterday, the lowest since Aug. 23. Bullion for December delivery slipped 0.6 percent to $1,387.30 on the Comex in New York.
Comex Trading
Comex floor trading was closed yesterday for the Labor Day holiday and yesterday’s transactions will be booked with today’s trades for settlement purposes. Futures trading volume was more than double the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
U.S. President Barack Obama is seeking approval from Congress before ordering military action against Syria for its alleged use of chemical weapons against civilians. The U.K. parliament voted against a strike last week.
The Fed, which purchases $85 billion a month in Treasury and mortgage debt, will reduce the amount of quantitative easing at their next meeting on Sept. 17-18, according to 65 percent of economists in an Aug. 9-13 Bloomberg survey.
“We maintain a fairly pessimistic outlook for gold as a result of the increased probability of a timetable for the ending of QE,” Morgan Stanley analysts led by Adam Longson wrote in a note. “The gold market ran out of steam after military action looked to be delayed.”
Silver for immediate delivery fell 0.3 percent to $24.077 an ounce in London, after climbing 2.6 percent yesterday, the most in a week. Platinum was 0.2 percent higher at $1,523 an ounce. Palladium was 0.5 percent higher at $718.65 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
