Gold slumped to a five week low, heading for its biggest weekly loss in more than two months, on speculation the U.S. Federal Reserve will taper asset purchases and as Goldman Sachs Group Inc. predicted further declines.
Bullion for immediate delivery fell as much as 1 percent to $1,308.18 an ounce, the lowest since Aug. 9, and was at $1,311.98 by 2:06 p.m. in Singapore. Prices earlier climbed 0.7 percent. The metal fell 3.2 percent yesterday and is down 5.7 percent this week, the most since the period to June 21.
Sept. 13 (Bloomberg) -- Alberto Calderon, adviser to chief executive officer Andrew Mackenzie at BHP Billiton Ltd. and a former executive at the world’s largest mining company, talks about the global metals market. He speaks in Singapore with Haslinda Amin on Bloomberg Television's "On the Move." (Source: Bloomberg)
Sept. 12 (Bloomberg) -- Evy Hambro, portfolio manager at BlackRock Inc.'s World Mining Fund, talks about the price of gold and holdings of exchange-traded funds. He speaks with Anna Edwards on Bloomberg Television's "On the Move." (Source: Bloomberg)
Sept. 9 (Bloomberg) -- Abhay Deshpande, a portfolio manager at First Eagle Investment Management, talks about investment strategy and the growth outlook for Microsoft Corp. Deshpande speaks with Betty Liu, Alix Steel and Scarlet Fu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Aug. 14 (Bloomberg) -- Bloomberg's Niki O'Callaghan reports on gold's decline from its 2011 peak, which has ravaged markets and livelihoods around the world. (Source: Bloomberg)
Sept. 12 (Bloomberg) -- Former U.S. Treasury Secretary Henry "Hank" Paulson talks about the government's response to the 2008 financial crisis, the risk of further crises, Federal Reserve policy and the concept of American exceptionalism. He speaks with Tom Keene on Bloomberg Television's "Street Smart." Bloomberg's Trish Regan also speaks. (Source: Bloomberg)
Gold tumbled 22 percent this year, set for the first annual drop in 13 years, as investors lost faith in the metal as a store of value and the Fed indicated it would start to buy fewer bonds. Prices rose to a three-month high on Aug. 28 on concern that strikes on Syria will disrupt Middle East oil supplies and stoke inflation, increasing demand for gold as a hedge. U.S. central bankers will meet Sept. 17-18 to decide whether to curb $85 billion in monthly debt purchases.
“We expect there will be volatility” before the Fed meeting, saidDavid Lennox, a resource analyst at Fat Prophets in Sydney. “Investors are jumping out of the safe haven of gold” as concerns about a U.S. military strike against Syria ease, he said by phone today.
U.S. Secretary of State John Kerry is meeting with his Russian counterpart over a deal to remove Syria’s chemical weapons. The U.S. and allies blame President Bashar al-Assad’s regime for a chemical-weapons attack on Aug. 21 that the U.S. says killed more than 1,400 people near Damascus.
Financial System
While debt-ceiling discussions in the U.S. and the Syrian crisis may support bullion in the near term, gold will resume its decline into next year, Jeffrey Currie, Goldman’s head of commodities research, said in an interview on Bloomberg Television today. The bank’s target is $1,050 for 2014, and the commodity may overshoot to the downside, with the risk of a slide below $1,000, he said in Singapore. Gold futures haven’t traded below that level since October 2009.
Gold rose 70 percent from December 2008 to June 2011 as the U.S. central bank pumped more than $2 trillion into the financial system by buying debt. Policy makers will cut the monthly purchases by $10 billion at next week’s meeting, a Bloomberg News survey of 34 economists Sept. 6 showed.
Jobless claims in the U.S. declined last week to the lowest since April 2006 as work on computer systems in two states caused those employment agencies to report fewer applications, data showed yesterday.
‘Messy Problem’
The Fed’s exit from quantitative easing will increase market volatility, former U.S. Treasury Secretary Henry Paulson said yesterday. “When you have a big, ugly, messy problem, there is never going to be a perfect, elegant solution,” he said in an interview on Bloomberg Television.
Gold for December delivery lost 1.3 percent to $1,314 an ounce on the Comex, down 5.2 percent this week.
Silver for immediate delivery gained 0.3 percent to $21.854 an ounce after dropping 0.6 percent to $21.658, the lowest since Aug. 14, and climbing 1.7 percent. Prices are set to tumble 8.5 percent this week, the most since the period to June 21.
Platinum fell as much as 0.3 percent to $1,432.26 an ounce, the lowest since Aug. 7, extending a third weekly loss. Palladium retreated 0.3 percent to $688.05 an ounce, set to decline for a fourth week.
To contact the reporter on this story: Phoebe Sedgman in Wellington atpsedgman2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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