Gold Drops as SPDR Assets Decrease

June 14, 2013 at 06:52

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Gold declined for a second day as holdings in the largest bullion backed exchange-traded product dropped to the lowest level in more than four years amid speculation the Federal Reserve will curb stimulus.

Assets in the SPDR Gold Trust fell 0.6 percent to 1,003.53 metric tons yesterday, according to data on the company’s website. That’s the biggest fall since May 21 and the lowest level since February 2009, data showed. Fed Chairman Ben S. Bernanke said on May 22 the central bank could reduce its $85 billion monthly bond purchases if the employment outlook shows a sustainable improvement.

“The market’s watching what the Fed is going to do,” said David Lennox, an analyst at Fat Prophets in Sydney. “We’ll be watching for indications from Bernanke about when it might end” quantitative easing, he said by phone today.

Gold has declined 17 percent this year on concern that as the U.S. economy improves the Fed may scale back debt purchases that helped bullion cap a 12-year bull run in 2012. Reports in the U.S. yesterday showed retail sales rose more than forecast in May and jobless claims dropped to 334,000 in the week ended June 8 from 346,000 in the prior period.