Gold retreated from the highest level since November as a five-day advance damped physical demand and US Federal Reserve Chairman Janet Yellen pledged to continue with a gradual tapering of stimulus.
Bullion for immediate delivery lost as much as 0.6% to $1 284.15 an ounce, and was at $1 286.78 at 3:12 pm in Singapore. Prices climbed to $1 293.93 on Tuesday, the highest level since November 14, capping a five-day, 2.9% rally that was the longest since August.
Gold is up 6.7% this year on haven demand from a rout in emerging markets even as US policy makers have twice since December cut monthly bond-buying by $10-billion. In her first testimony to Congress as head of the Fed, Yellen said stimulus will be cut in measured steps, while reiterating that purchases aren't on a preset course. Volumes for Shanghai's benchmark spot contract fell on Tuesday from a nine-month high.
"Physical buyers are very sensitive to price changes so it's no surprise if demand slows," said Lv Jie, an analyst at Cinda Futures, a unit of one of four funds in China created to buy bad debt from banks. "ETF flows appear to be stabilising and bullion investors seem to interpret Yellen's comments as neutral for the market."
Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, rose on Tuesday after holdings were unchanged for four days. The holdings are little changed this year after contracting 41% in 2013.
Gold for April delivery decreased as much as 0.5% to $1 283.90 an ounce on the Comex in New York and traded at $1 286.90, halting a five-day advance that was the longest winning run for a most-active contract since August 2012.
Silver lost 0.3% to $20.1685 an ounce, snapping an eight-day advance that was the longest rally since August. Palladium added 0.3% to $720.85 an ounce, set for a sixth day of gains in the longest winning streak since July.
Platinum rose 0.2% to $1 391.25 an ounce, climbing for a fourth day. Talks to end a strike over pay that has crippled production at the world's largest platinum mines have been delayed to February 13 from Tuesday after the companies requested more time. – Bloomberg