Gold Swings as Investors Weigh Stimulus Outlook Amid ETP Decline

Gold swung between gains and losses as investors weighed the outlook for stimulus by the U.S. Federal Reserve amid further outflows in investor holdings.

Spot gold was little changed at $1,377.23 an ounce at 8:22 a.m. in Singapore, after rising and falling at least 0.2 percent. Prices retreated 1.3 percent yesterday.

Fed Chairman Ben S. Bernanke testifies in Congress today, and the central bank will publish minutes of its latest meeting. St. Louis Fed President James Bullard said yesterday the central bank should keep buying bonds and New York Fed President William Dudley said it had previously been overly optimistic about growth. Gold has tumbled 18 percent this year, dropping into a bear market last month, on expectations the Fed may scale back stimulus that helped the metal cap a 12-year bull run in 2012.

Bullion for June delivery was little changed at $1,376.20 an ounce on the Comex in New York after dropping for eight of the past nine days.

Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, dropped to 1,023.08 metric tons yesterday, the lowest since February 2009, according to data on the company’s website. Total holdings in exchange-traded products backed by gold have fallen 17 percent this year, according to data compiled by Bloomberg.

(Source: Bloomberg)