Gold price eyes worst week in three months on taper sell-off
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Gold price eyes worst week in three months on taper sell-off

Last Updated: Friday, December 20, 2013, 12:34
 
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Gold price eyes worst week in three months on taper sell-off
Singapore: Gold languished at a six-month low on Friday and was on the edge of tipping over to a 3-1/2 year trough after the Federal Reserve's move to cut back its bond-buying stimulus prompted a huge sell-off.

The metal is heading for its worst weekly performance in three months and its biggest annual loss in 32 years.

FUNDAMENTALS

* Spot gold had gained 0.2 percent to USD 1,191.91 an ounce by 0016 GMT, after earlier hitting its lowest since June at USD 1,185.10. Gold touched USD 1,180.71 in late June - its weakest since 2010.

* On Wednesday, the day of the Fed announcement of a USD 10 billion cut in its monthly bond purchases, gold fell 1 percent. But the selling picked up on Thursday, with the metal losing 2 percent.

* It has lost nearly 4 percent for the week, and 29 percent for the year.

* The Fed's USD 85 billion in monthly bond purchases, along with other monetary stimulus measures, had fuelled a big run-up in gold prices in the last few years, with the metal hitting an all-time high of USD 1,920.30 in 2011.

* However, with an improving economy and stubborn low-inflation in the United States, gold's appeal has dropped off.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 3.90 tonnes to 808.72 tonnes on Thursday.

* Russian precious metals and gems repository Gokhran may consider buying palladium on the market to increase its stocks, its new head Andrey Yurin said, signalling a possible change in strategy.

MARKET NEWS

* Asian shares got off to a cautious start on Friday tracking a more circumspect session on Wall Street overnight, as investors reassessed the Fed's policy outlook following its decision this week to start tapering its massive stimulus.



Reuters

First Published: Friday, December 20, 2013, 09:39


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