BackGold extends decline on prospects for further tapering by Fed
Bullion for immediate delivery lost as much as 0.7% to $1,293.66 an ounce and traded at $1,300.31 at 2:52 pm in Singapore,
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Singapore: Gold retreated for a second day, extending the biggest drop in three weeks, on prospects for further cuts to the Federal Reserve’s stimulus programme as the US economy shows signs of recovery. Silver fell.
Bullion for immediate delivery lost as much as 0.7% to $1,293.66 an ounce and traded at $1,300.31 at 2:52 pm in Singapore, according to Bloomberg generic pricing. The metal slumped 1.9% on Tuesday, the most since 24 March.
Gold ended a 12-year bull run in 2013 on expectations that the Fed would cut stimulus as the largest economy recovered. Fed chair Janet Yellen is scheduled to address the Economic Club of New York today after data yesterday showed that US consumer prices accelerated in March. Bullion has rebounded 8.2% this year as unrest in Ukraine spurred haven demand.
Gold is driven in turn by US economic data and the situation in Ukraine, said Zhu Siquan, an analyst at GF Futures Co, a unit of the Guangzhou-based company that bought Natixis Commodity Markets Ltd.
In an escalation of the conflict, Ukrainian troops retook state buildings from armed pro-Russia activists in the eastern Donetsk region on Tuesday as Russia warned of a civil war. White House spokesman Jay Carney said while the US is considering military assistance to Ukraine, lethal aid isn’t an option.
China growth
Economic growth in China slowed in the first three months of 2014 to 7.4%, the weakest pace in six quarters, according to data today. Asia’s largest economy is the world’s biggest gold consumer.
Bullion demand in China may face some headwind amid economic reform, Albert Cheng, Far East managing director at World Gold Council, said in a Bloomberg Television interview after the data. As much as 1,000 metric tons in China may be tied up in financing deals, the council said yesterday.
Gold for June delivery fell 0.5% to $1,293.80 an ounce on the Comex in New York. Futures tumbled the most in 16 weeks on Tuesday as the increase in US consumer prices spurred speculation that Fed policymakers would have more leeway to extend cuts to stimulus.
Silver for immediate delivery lost 1.2% to $19.385 an ounce, extending losses into a fourth day. Platinum fell 0.4% to $1,434.75 an ounce after dropping 1.7% on Tuesday, the most since 30 January. Palladium was at $794.09 an ounce from $794.65 Tuesday. BLOOMBERG
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