News with Tags "Gold"

SINGAPORE: Gold fell for a fourth straight session on Thursday to its lowest level since a 15 percent plunge in mid-April, after the U.S. Federal Reserve signalled it would slow the pace of bond purchases later this year.

A scale-back of the $85 billion monthly asset purchases is likely to weaken support for gold prices, already down about 20 percent this year due to rapid outflows from exchange-traded funds and slowing demand in top consumers, India and China.

"I wouldn't be in a rush to say it's the end of gold," said Amber MacKinnon, an analyst at Nomura Securities in Sydney. "This is definitely a big turning point. But though we have seen some reasonable amount of stability in the U.S. economy, there is still a long way to run."

"Early next year will be pretty telling in terms of economic data. We'll have to see how unemployment reacts to any scale-back in bond purchases."

Fed Chairman Ben Bernanke said on Wednesday the central bank will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year if the U.S. economy continued to show strength.

Until recently, gold - seen as a hedge against inflation - had gained as the global economy took a hit and central banks acted to boost their economies. Gold touched an all-time high of $1,920.30 in 2011.

Spot gold fell 0.3 percent to $1,346.61 an ounce by 0340 GMT, down more than 3 percent for the week. It touched $1,338.84 earlier in the session - not far off the lows in mid-April when gold fell the most in 30 years.

U.S. gold fell over 2 percent, or $28, to $1345.8. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell below 1,000 tonnes on Wednesday for the first time in 4 years.

"With the negative sentiment that we have in gold currently, we really do need to see a significant amount of physical buying in order to stabilize the market - which we are not seeing," said Mark Keenan, cross-commodity research strategist at Societe Generale in Singapore.

SocGen lowered its forecast for gold earlier this week, saying prices will fall to $1,200 an ounce by the end of the year, mainly due to the Fed's expected pullback in bond buying.

Demand in India has fallen off since the government hiked the import duty on bullion. China demand has slowed from peak levels seen earlier in the year.

China's factory activity weakened to a 9-month low in June as demand faltered, a preliminary survey showed, heightening risks that a second quarter slowdown could be sharper than expected.

LONDON/SINGAPORE: Gold traded above the lowest price in more than three weeks in New York before the US Federal Reserve concludes a policy meeting that may indicate when the central bank will reduce stimulus.

The US Dollar Index, a measure against six major currencies, and global equities were little changed before the Fed ends a two-day meeting on Wednesday. The US central bank currently buys $85 billion a month of Treasury and mortgage debt. Fed Chairman Ben S Bernanke said last month the pace of monthly purchases could be reduced if the employment outlook shows sustained improvement.

"Any signs of improvement in growth expectations will further fuel uncertainty about the Fed's asset purchase programme," Mumbai-based Kotak Commodity Services said on Wednesday in a report. "Any sign of curtailment in asset purchases will be negative for gold, however it has been factored in to some extent."

Gold for August delivery added 0.3% to $1,371.60 an ounce on the Comex in New York. Prices rose 0.4% and fell 0.2% on Wednesday after reaching $1,360.20 on Tuesday, the lowest since May 23.

Futures trading volume was 49% below the average in the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London rose 0.4% to $1,372.70.

Holdings in exchange-traded products fell 1.6 tonne to 2,114.6 tonne on Tuesday, the lowest since March 2011, according to data compiled by Bloomberg. Assets are down 20% in 2013 after climbing every year since the first product was listed in 2003.

Prices slid 18% this year as an improving US economy increased speculation the Fed may taper quantitative-easing measures that helped bullion cap a 12-year bull run in 2012.

Newcrest Mining, Australia's largest gold producer, said this month it will write down the value of its assets by as much as A$6 billion ($5.7 billion) after the slump in prices.

"Gold remains trapped in a range as no one wants to take a stand before the end of the Fed meeting," said Xiang Nan, an analyst at CITIC Securities Futures. "Investors will be watching closely what the Fed has to say with regards to monetary stimulus."

Silver for July delivery lost 0.2% to $21.63 an ounce in New York. Platinum for July delivery was little changed at $1,441 an ounce, after falling to $1,425.10 on Tuesday, the lowest since April 24. Palladium was little changed at $708.60 an ounce.

NEW YORK/LONDON: Gold fell to a one-month low on Wednesday after the US Federal Reserve chairman said he expects to slow the pace of the central bank's bond purchases later this year and bring them to a halt around mid-2014.

After trading higher most of the session, bullion prices tumbled after the Fed sharply lowered its forecast for inflation in a statement released at the end of its two-day policy meeting.

The precious metal fell further after Fed Chairman Ben Bernanke said at a later press conference on the Fed's decision that "The committee currently anticipates that it will be appropriate to moderate the monthly pace of purchases later this year."

Bernanke said that the Fed will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year if the Fed's economic forecasts are correct.

Gold fell as global markets were rattled by the Fed chief's comment, with US equities falling around 1 per cent and Treasuries bond yields, seen as US short-term interest rates, rising sharply and the dollar index up 1 per cent.

"Bernanke is talking about pulling away stimulus, and that's not really what the market wants to hear. The more stimulus there is, the more powerful the inflationary case for gold," said Sean McGillivray, head of asset allocation at Great Pacific Wealth Management.

Spot gold was down 1.3 per cent to $1,349.86 an ounce by 3:49 p.m. EDT (1949 GMT), having hit $1,348.99, its lowest price since May 20.

Prior to the Fed announcement, US Comex gold futures for August delivery settled up $7.10 an ounce at $1,374. Trading volume was at around 125,000 lots versus its 30-day daily average of 215,000, preliminary Reuters data showed.

Since Bernanke said last month the bank could scale back its stimulus measures, gold prices have fallen in tandem with the S&P 500.

McGillivray, however, said gold might still benefit from Fed stimulus in the near term.

"I don't think the country can stop buying bonds. The economy is still fragile and the cost of capital will increase so substantially as you are seeing in bonds right now," he said.

The yield on benchmark US Treasury notes rose to fresh 14-month high on Wednesday after Bernanke's remarks.

INFLATION GAUGE LOWERED

In a statement, the Fed's policy-setting panel offered a more upbeat assessment of the risks facing the economy than they had after they last met in May.

In a sharp downgrade, the Fed forecast the PCE price index, its preferred gauge of the price pressures facing consumers, would rise just 0.8 to 1.2 per cent this year. However, it saw inflation heading back to 1.4 to 2.0 per cent in 2014 and 1.6 to 2.0 per cent in 2015.

"You are looking at continued slow growth but no inflation and no panic on the horizon, that makes gold less attractive and ultimately makes stocks more attractive," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.

Among other precious metals, silver was down 1.6 per cent at $21.30 an ounce. Platinum dropped 1.7 per cent to $1,415.49 an ounce and palladium fell 2.2 per cent to $692.22 an ounce.

MUMBAI: Gold prices retreated at the domestic bullion market today due to reduced stockists as well as investment buying amid bearish global sentiment.

On the other hand, silver firmed up further on steady industrial support.

Standard gold of 99.5 per cent purity shed Rs 100 to conclude at Rs 27,925 per 10 gm from Tuesday's closing level of Rs 28,025.

Pure gold of 99.9 per cent purity also fell by a similar margin to end at Rs 28,070 per 10 gm from Rs 28,170.

Silver ready (.999 fineness), however edged higher by Rs 50 to finish at Rs 45,050 per kg compared to Rs 45,000 yesterday.

On the global front, yellow-metal traded slightly higher amid caution ahead of the Federal Reserve policy meet outcome later today.

Spot gold was bid up at USD 1,368 an ounce in early European trade.

NEW DELHI: Gold prices fell by Rs 80 to Rs 28,400 per ten grams here today due to slackened demand amid a weak global trend.

On the other hand, silver ready ruled flat at Rs 44,600 per kg, while weekly-based delivery shed Rs 80 to Rs 43,780 per kg on lack of speculators' buying support.

Sentiment in Gold turned bearish after it dropped to over three-week low in the global markets as investors await the conclusion of the US Federal Reserve's policy meet, traders said.

Also, sluggish demand due to off-marriage season put further pressure on gold.

Globally, gold in Singapore, which normally sets price trend on the domestic front, traded at $1,365.22 an ounce from $1,367.65 yesterday. Silver also fell 0.2 per cent to $21.63 an ounce.

On the domestic front, gold of 99.9 and 99.5 per cent purity fell by Rs 80 each to Rs 28,400 and Rs 28,200 per ten grams, respectively.

The yellow metal had gained Rs 230 yesterday. Sovereign, however, held steady at Rs 24,400 per piece of eight gram.

Meanwhile, silver coins continued to be asked around previous level of Rs 80,000 for buying and Rs 81,000 for selling of 100 pieces.