Gold swung between gains and losses as investors weighed speculation the Federal Reserve will maintain its record stimulus against a continuing decline in investor assets. Prices headed for the best week in a month.
Bullion for immediate delivery traded at $1,391.05 an ounce at 9:33 a.m. in Singapore after losing as much as 0.3 percent. Prices increased 2.3 percent this week, the biggest advance since the period to April 26. Cash silver fell 0.7 percent to $22.445 an ounce.Gold tumbled 17 percent this year, slipping into a bear market last month, as equities rallied and some investors lost faith in the metal as a store of value on concern that the Fed may scale back stimulus measures. Raising interest rates or curbing bond buying too soon would endanger the recovery, Fed Chairman Ben S. Bernanke said May 22. Gold rose 58 percent since 2008 as the Fed led central banks in debt purchases.
Bernanke’s “major concern is pulling back from quantitative easing too early,” said Steven Dooley, head of research at brokerage Forex Capital Trading Pty in Melbourne. The market “believes quantitative easing might not be tapered off quite as early as previously thought,” he said.Holdings in gold-backed exchange-traded products contracted 467 metric tons this year, surpassing combined inflows over the past two years, according to data compiled by Bloomberg. Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, dropped to 1,018.57 tons yesterday, the lowest since February 2009, according to data compiled by Bloomberg.
Platinum for immediate delivery fell 0.1 percent to $1,458 an ounce after ETP holdings reached a record 61.82 tons. Palladium rose 0.2 percent to $738.50 an ounce.
To contact the reporter for this story: Phoebe Sedgman in Melbourne at email@example.com
Source : Bullion Bulletin