Gold extends drop from 3-week highComment on this story
London - Gold fell from a three-week high in London on speculation the U.S. Federal Reserve will ease monetary stimulus after a two-day policy meeting that starts today. Silver also declined.
Gold, which climbed 1.9 percent last week amid escalating tensions from Ukraine to Iraq, halted a 12-year bull run in 2013 on speculation the Fed would reduce stimulus measures as the U.S. economy improved. Policy makers already cut asset purchases four times this year. The majority of economists in a Bloomberg News survey said the central bank will end its asset-purchase program, known as quantitative easing, at its October meeting.
The Federal Open Market Committee’s “June meeting will be in focus this week while a U.S. dollar rebound could weigh on bullion prices, provided Iraqi headlines subside,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e- mailed note today. “Bullion’s long-term outlook remains unaltered, despite the safe-haven trading last week.”
Gold for immediate delivery fell 0.6 percent to $1,264.80 an ounce by 10:38 a.m. in London, according to Bloomberg generic pricing. The precious metal touched $1,284.96 yesterday, the highest since May 27, before erasing gains as U.S. data showed factory output beat estimates and builder sentiment jumped by the most in almost a year.
Gold for August delivery dropped 0.8 percent to $1,264.80 an ounce on the Comex in New York. Futures yesterday capped the longest rally since February. In Iraq, fighters from an al-Qaeda breakaway group clashed with government forces north of Baghdad as the U.S. weighed military options to prevent the militants from breaking up the country.
Silver for immediate delivery decreased 0.3 percent to $19.6095 an ounce in London, after yesterday touching $19.889, the highest intraday price since May 14. Platinum slid 0.3 percent to $1,430.75 an ounce. Palladium was little changed at $810 an ounce.