BLBG:Gold Swings as Investors Weigh Stimulus After Rally in Equities
Gold swung between gains and losses in London as investors weighed the outlook for U.S. stimulus, slower physical demand for the metal and strengthened equities. Silver reached the lowest since August.
Global equities held near the highest level since January 2008 and rallied 18 percent this year on prospects for an economic recovery. Gold will probably be sold on rallies approaching $1,300 an ounce until physical demand improves, Standard Bank Group Ltd. wrote in a report yesterday.
Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. Federal Reserve New York President William C. Dudley said yesterday he’s more hopeful about the economy while indicating no change in bond buying. Janet Yellen, the nominee to replace Ben S. Bernanke as Fed chairman, signaled on Nov. 14 that she’d continue with record stimulus until the economy is stronger.
“The market remains in a ‘wait-and-see mode’ with reluctant investors and absent physical buyers,” Andrey Kryuchenkov, a commodity strategist in London at VTB Capital, wrote in a report today. Traders are “still clueless on the exact timing to the looming quantitative easing tapering, with large players in the physical market choosing to stay away for now, given no seasonal rush from Asia until earlier next year.”
Gold for immediate delivery was little changed at $1,274.72 an ounce by 9:29 a.m. in London. Prices rose as much as 0.1 percent and fell as much as 0.3 percent. Bullion for December delivery added 0.1 percent to $1,273.90 on the Comex in New York. Futures trading volume was 33 percent below average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Fed Stimulus
The U.S. central bank buys $85 billion of Treasuries and mortgage-backed securities each month and economists surveyed by Bloomberg News Nov. 8 forecast policy makers probably will start reducing bond purchases in March. The Fed will release minutes of its Oct. 29-30 meeting tomorrow.
Holdings in gold-backed exchange-traded products fell 2 metric tons to 1,867.5 tons yesterday, the lowest since April 2010, data compiled by Bloomberg show.
Silver for immediate delivery fell 0.4 percent to $20.346 an ounce in London, after reaching $20.2254, the lowest since Aug. 9. Palladium gained 0.2 percent to $718 an ounce after ealier touching $713.03, the lowest since Oct. 16. Platinum added 0.4 percent to $1,416.20 an ounce. Prices fell to $1,405.15 earlier today, the lowest since Oct. 17.
Northam Platinum Ltd. workers in South Africa have been on strike for two weeks and the National Union of Mineworkers will meet with members today at the company to discuss a “fresh mandate,” the union’s chief negotiator, Ecliff Tantsi, said. South Africa accounts for about 72 percent of platinum mine supply and about 36 percent of palladium output, according to Barclays Plc.
To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Claudia Carpenter at ccarpenter2@bloomberg.net
