Gold traded near the lowest level in almost a week as investors reduced holdings of the metal on speculation that the U.S. Federal Reserve may scale back stimulus as the recovery gains traction.
Gold for immediate delivery was little changed at $1,558.85 an ounce at 9:33 a.m. in Singapore after dropping 0.3 percent to $1,553.65, the lowest since April 5. Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, fell to 1,183.53 metric tons yesterday, the least since May 2010. Holdings have lost 12 percent in 2013 as prices sank 7 percent.
Several Fed officials said the central bank should begin tapering its quantitative-easing program later this year and stop it by year end, according to the minutes of their March meeting, released yesterday. Goldman Sachs Group Inc. yesterday cut forecasts for the metal through 2014, saying the turn in the price cycle is accelerating on the U.S. economic recovery. Each month the Fed buys $85 billion of securities.
“Negative sentiment towards gold continued, latest data from the SPDR Gold Trust showed holdings fell,” Australia & New Zealand Banking Group Ltd. analyst Mark Pervan wrote in a note today. “The upbeat tone of the Fed minutes predates the more recent run of softer U.S. data.”
Data last week showed jobs growth in the largest economy in March was the slowest in nine months. Fed Chairman Ben S. Bernanke said earlier this week that U.S. economic conditions aren’t what he’d like them to be.
Gold fell 1.7 percent yesterday, the biggest drop since Feb. 20, after the minutes, and as Cyprus, the fifth euro-area member to gain a bailout, was told by its partners that is must keep its commitments to sell so-called excess gold. The price, which rallied for a 12th year in 2012 as central banks boosted stimulus, has dropped 18 percent from its record close in September 2011.
Gold for June delivery was little changed at $1,559.50 an ounce on the Comex in New York after losing 1.8 percent yesterday. Cash silver dropped 0.2 percent to $27.5731 an ounce, extending yesterday’s 1.3 percent decline.
Spot platinum retreated 0.2 percent to $1,525.50 an ounce, and palladium was little changed at $718.90 an ounce after dropping to $707 yesterday, the lowest since Jan. 16.
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