Gold Trades Near One-Month Low on Outlook for Stimulus Reduction

Gold traded near a one-month low after a four-day losing run as expectations that the U.S. Federal Reserve may soon begin to scale back stimulus reduced demand for a store of value.

Bullion for immediate delivery was at $1,269.01 an ounce at 9:01 a.m. in Singapore from $1,268 yesterday, when the metal declined to $1,261.42, the lowest level since Oct. 15. Bullion has risen only once since Oct. 29 while the dollar advanced.

Gold lost 24 percent in 2013 as prospects for a recovery hurt demand for haven assets. Fed Bank of Atlanta President Dennis Lockhart said yesterday while he wants to see inflation accelerate before the Fed cuts its $85 billion of monthly bond buying, “some discussion of tapering could well take place next month.” Policy makers will decide to pare purchases to $70 billion at their March 18-19 meeting, according to the median of 32 economist estimates in a Bloomberg survey on Nov. 8.

Gold for delivery in December lost 0.4 percent to $1,266.30 an ounce on the Comex in New York after dropping yesterday to $1,260.50, the lowest since Oct. 15. Trading volume was 42 percent below the average for the past 100 days at this time.

Spot silver retreated 0.2 percent to $20.6975 an ounce, sliding for a fifth day. Prices tumbled to $20.585 yesterday, the lowest level since Oct. 15.

(Source: Bloomberg)