Gold Slips on Syria & Tapering Talk

September 10, 2013 at 09:04

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Gold dropped for a second day on speculation that the U.S. Federal Reserve will start to pare stimulus from next week, and as a bid to avert military action in Syria eroded haven demand. Silver declined.

Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, dropped to 917.13 metric tons yesterday, after holding steady for three days.

Bullion has lost 18 percent this year amid expectations the Fed will cut the $85 billion monthly bond-buying program as the economy improves. The Fed will reduce the asset purchases by $10 billion at the Sept. 17-18 meeting, according to a Sept. 6 survey, even after data earlier that day showed U.S. employers added fewer jobs than estimated in August.

β€œThe market is likely to be influenced by discussions over tapering and geopolitical tensions relating to the situation in Syria,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note.

Gold climbed to a three-month high at the end of August as political tension in the Middle East spurred haven demand. Russian Foreign Minister Sergei Lavrov yesterday proposed that Syria surrender its chemical weapons, if that would forestall a military strike led by the U.S.

Gold for December delivery declined 0.7 percent to $1,376.80 an ounce on the Comex in New York. Futures yesterday swung between gains and losses before settling little changed.
Silver for immediate delivery sank 1.6 percent to $23.3354 an ounce, retreating for a second day. Platinum lost 0.2 percent to $1,480 an ounce and palladium fell 0.3 percent to $685 an ounce.