Singapore - Gold fell as prospects for an attack against Syria receded, and on bets the US Federal Reserve will start to pare stimulus as the economy improves.
Silver halted a three-day drop as manufacturing in China sustained an expansion.
Spot gold lost as much as 1.6 percent to $1,373.38 an ounce, falling for a third day to the lowest level since August 23.
It traded at $1,389.79 at 9:54 a.m. in Singapore.
Prices have retreated since reaching a three-month high of $1,433.83 on August 28 as improving data supported the case for the Fed to start reducing the $85 billion in monthly asset purchases this month.
While the Syrian crisis helped gold post a second monthly gain in August on increased haven demand, prices are down 17 percent this year.
US President Barack Obama said on August 31 that he’ll seek approval from Congress before ordering a military strike against Syria for its alleged use of chemical weapons against civilians.
UK Prime Minister David Cameron lost a parliamentary vote on military action last week.
“As the issue of Syria subsides, the withdrawal of stimulus in the US remains the top concern in investors’ minds, and that will weigh on gold,” said Sun Yonggang, a Shanghai- based macroeconomic strategist at Everbright Futures Co.
Data this week may show US employers added more workers in August after a report last week said that the US grew faster than analysts forecast in the second quarter, expanding 2.5 percent, up from an initial estimate of 1.7 percent.
The Federal Open Market Committee assesses policy September 17-18.
Gold for December delivery fell as much as 1.6 percent to $1,373.60 an ounce on the Comex in New York, the lowest level since August 23, and traded at $1,380.40.
Money managers boosted their net-long position by 34 percent to 97,902 futures and options by August 27, as holdings of short contracts tumbled 37 percent, US Commodity Futures Trading Commission data show.
Silver rallied as much as 1.9 percent to $23.964 an ounce, and was at $23.8893, gaining with other industrial metals including copper and lead.
The price dropped as much as 1.9 percent to $23.088 earlier, the lowest level since August 23.
China’s Purchasing Managers’ Index was at 51, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday.
That compares with the 50.6 median estimate of 31 analysts in a Bloomberg survey and July’s 50.3 level.
China is the second-biggest consumer of the metal that’s used in solar panels, electronics and jewelry.
“Silver is faring better than gold as China’s economy is showing signs of recovery,” said Everbright’s Sun.
“Gains in the other metals may limit gold’s decline,” he said.
Platinum increased 0.4 percent to $1,528.60 an ounce, reversing earlier losses of as much as 0.7 percent.
Palladium rose 0.6 percent to $726.35 an ounce.
Anglo American Platinum Ltd. will fire about 3,300 workers, and 3,600 will be redeployed or voluntarily quit, as the biggest producer reduces staff and idles shafts to revive earnings, the Johannesburg-based company said on August 30.
Mark Cutifani, chief executive of parent Anglo American Plc, said that he will close or sell more mines if profits don’t improve next year.
South Africa’s National Union of Mineworkers, which represents about 64 percent of gold miners in the country, will start a strike over pay from Sept. 3, the Chamber of Mines said in a statement on August 30.
South Africa is the world’s fifth largest producer, according to the US Geological Survey. - Bloomberg News