Tags: gold | bullion | Federal Reserve | bond

Gold Falls to Two-Week Low as Fed Expected to End Bond Purchases

Wednesday, 29 Oct 2014 01:51 PM

Gold futures fell to a two-week low on speculation the Federal Reserve will end monthly debt purchases amid gains in the U.S. economy, eroding demand for the precious metal as a haven.

The MSCI All-Country World Index of equities rose to a four-week high, partly on expectations that the Fed will keep interest rates low for an extended period. Gold declined 8.4 percent in the third quarter as U.S. shares jumped to a record.

The U.S. economy isn’t in danger of a major pullback even as Europe languishes and China’s growth slows, Treasury Secretary Jacob J. Lew said today. On Oct. 6, gold fell to the cheapest this year as demand waned for a store of value.

“People don’t want to invest in gold on the day Fed will probably end the stimulus program,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The strength in the equity market continues to put pressure on gold prices.”

Gold futures for December delivery fell 0.4 percent to $1,224.90 an ounce at 10:26 a.m. on the Comex in New York. Earlier, the price touched $1,220.80, the lowest for a most- active contract since Oct. 10.

Aggregate trading was 30 percent below the average for the past 100 days for this time, data compiled by Bloomberg show.

Gold climbed as much as 6.1 from this year’s low of $1,183.30 after the Fed cited slowing foreign economies as a risk to the U.S. That prompted some investors to push back estimates for an increase in interest rates.

Holdings Decline

Yesterday, global holdings in exchange-traded products backed by gold fell 1.8 metric tons to 1,652.1 tons, extending a slump to a five-year low, according to data compiled by Bloomberg.

Russia boosted gold reserves by the most since defaulting on local debt in 1998, driving metal holdings to the largest in at least two decades, International Monetary Fund data showed.

Silver futures for December delivery rose 0.2 percent to $17.255 an ounce.

On the New York Mercantile Exchange, palladium futures for December delivery advanced 0.9 percent to $799.35 an ounce. The price rose for the ninth straight session, the longest rally since Aug. 18.

Platinum futures for January delivery gained 0.8 percent to $1,276.30 an ounce.

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Gold futures fell to a two-week low on speculation the Federal Reserve will end monthly debt purchases amid gains in the U.S. economy, eroding demand for the precious metal as a haven.
gold, bullion, Federal Reserve, bond
378
2014-51-29
Wednesday, 29 Oct 2014 01:51 PM
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