Gold falls to 1-month low on Fed stimulus outlook

Gold fell for a fourth straight session on Thursday to its lowest in a month after the Federal Reserve said the U.S. economy was recovering strongly enough for the central bank to slow the pace of bond purchases later this year.
FUNDAMENTALS
· Spot gold fell 0.4 percent to $1,344.9 an ounce by0013 GMT, after falling 1.2 percent on Wednesday. Bullion, which is down over 3 percent for the week, touched a low of $1,342.74 earlier in the session.
· U.S. gold fell over 2 percent to $1344.10.
· Fed Chairman Ben Bernanke’s confirmation that the bank is getting closer to pulling back on its $85 billion in monthly asset purchases confirmed investor fears, sending stocks and bonds sharply lower and pushing benchmark Treasury yields to a 15-month high.
· Bernanke said 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.
· The bond purchases have helped support gold prices this year even as investors dumped bullion, which is typically seen as a hedge against inflation, in favour of stocks.
· Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell below 1,000 tons for the first time in 4 years.
· SPDR holdings fell 0.2 percent to 999.56 tons on
Wednesday from 1,001.66 tons on Tuesday, the lowest since February 2009.
· Russian gold production rose by 8.3 percent in the first four months of 2013 compared to the same period of last year, the Gold Industrialists’ Union said on Wednesday.
Precious metals prices 0013 GMT

Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1344.9 -5.79 -0.43 -19.69
Spot Silver 21.19 -0.12 -0.56 -30.02
Spot Platinum 1404.24 -5.76 -0.41 -8.52
Spot Palladium 686.72 -7.28 -1.05 -0.76
COMEX GOLD AUG3 1344.1 -29.9 -2.18 -19.79 7537
COMEX SILVER JU L3
Euro/Dollar 1.3288
Dollar/Yen 96.47

 
COMEX gold and silver contracts show the most active months
 
Source: Reuters
Source: Bullion Bulletin

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