Gold continues to struggle as uncertainty over the Federal Reserve's quantitive easing plans continue.
Gold advanced, trimming the first weekly loss in three, as the biggest price drop in a month may have lured buyers. Platinum and palladium climbed.
Bullion for immediate delivery gained as much as 0.4% to $1 327.78 an ounce, and traded at $1 326.25 at in 3:01 pm trade in Singapore. Prices that fell 1.6% on Wednesday, the most since October 1, are down 1.8% this week on speculation the Federal Reserve will pare stimulus sooner than expected.
The US central bank said this week there are signs of “underlying strength” in the largest economy even as policy makers maintained the $85-billion-a-month in bond buying, signaling the possibility of reduced purchases as soon as December, according to Citigroup and Barclays. Economists surveyed by Bloomberg have predicted the Fed would begin tapering stimulus in March.
“While monetary policy remains accommodative, the downside may be limited for now,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner. While the Fed’s decision to stand pat this time was expected, what policy makers said had some Fed watchers speculating that a policy change could come sooner than expected, To said.
Gold tumbled 21% in 2013 after rallying for 12 years, as unprecedented money printing failed to spur inflation and as investors sold metal at a record pace from exchange- traded products. Assets in bullion-backed ETPs contracted for a tenth month in October and are down 29% this year after climbing every year since the first product was listed in 2003.
Gold for delivery in December traded 0.2% higher at $1 325.90 an ounce on the Comex in New York after dropping 1.9% on Thursday. Trading volume was 53% below the average for the past 100 days for this time of day.
Spot silver rose 0.2% to $21.9557 an ounce after slumping 3.7% on Thursday, heading for a weekly loss. Platinum advanced 0.5% $1 456.33 an ounce, poised for a third weekly increase. Palladium climbed 0.6% to $741.55 an ounce.
South Africa’s National Union of Mineworkers said it would strike at Northam Platinum on November 3 while Solidarity rejected an offer by Lonmin. Members of the Association of Mineworkers and Construction Union voted on October 28 to strike at Impala Platinum Holdings operations. – Bloomberg