Gold drops toward 1-week lowComment on this story
Singapore - Gold fell toward a one-week low as investors awaited the end of the US Federal Reserve’s two-day policy meeting and assessed the situation in Ukraine.
Silver retreated for a third day.
Bullion for immediate delivery lost as much as 0.3 percent to $1,351.16 an ounce before trading at $1,353.29 at 3:59 p.m. in Singapore.
Yesterday the metal fell to $1,350.88, the lowest since March 12, and capped a two-day, 2 percent decline as some signs of easing tension in Ukraine boosted equities and sapped haven demand.
The Fed will press on with cuts to its bond buying program and switch to qualitative guidance on interest rates, according to a Bloomberg survey before the central bank releases a statement today.
While Russian President Vladimir Putin said his country didn’t intend to split Ukraine further, the US and Europe pledged more sanctions for his drive to annex Crimea.
“Traders have turned their attention to the outcome of the Fed meeting,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner.
“Sanctions by the US and European Union were seen as minimal but as long as the situation in Ukraine remains unresolved, this should keep prices supported.”
Gold advanced 12 percent this year as turmoil in Ukraine and signs of slowing growth increased demand for haven assets.
Prices rebounded from the biggest annual slump since 1981 even as the US central bank started to scale back asset purchases.
The Fed, which cut monthly bond buying by $10 billion at the prior two meetings, will trim purchases by another $10 billion to $55 billion, and continue on that pace at every meeting before announcing an end to the program at its October 28-29 gathering, according to the March 14-17 survey.
In China, the largest consumer, volumes for the benchmark spot contract in Shanghai rose to a three-week high today as metal for immediate delivery traded at a $6.70 discount to the London price by 3:21 p.m. local time.
Gold for April delivery slid 0.5 percent to $1,352.10 an ounce on the Comex in New York, extending yesterday’s 1 percent drop.
Assets in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, were unchanged yesterday after falling 0.5 percent on March 17, the biggest one-day contraction since February 19.
Silver for immediate delivery retreated 0.4 percent to $20.7454 an ounce.
Platinum increased 0.2 percent to $1,462 an ounce, halting a three-day drop, while palladium was at $768.18 an ounce from $768.04 yesterday.
The union leading a strike that began January 23 at the world’s largest platinum mines said it won’t back down on demands that pay for some workers be doubled as members marched on Anglo American Platinum’s Johannesburg offices. - Bloomberg News