“Gold declined, following its first gain in eight sessions, as speculation the U.S. Federal Reserve may taper its bond-buying plan curbed demand for the metal as a protection of wealth.
Fed Chairman Ben S. Bernanke will discuss the economic outlook in congressional testimony and the central bank will publish minutes of its latest meeting tomorrow. Fed Bank of Chicago President Charles Evans said yesterday the economy has improved “quite a lot.” Gold futures rose 1.4 percent yesterday, the first gain since May 8, after Moody’s Investors Service said U.S. policy makers must address debt woes to avoid a credit-rating cut this year.
“Market participants should be watching the Fed Chairman Ben Bernanke’s speech and the Federal Open Market Committee minutes, which are expected to give rise to concerns of the continuation of the QE program,” analysts at Hyderabad, India-based Karvy Comtrade Ltd. wrote today in a report, referring to quantitative easing. “This would weigh down on gold prices.”
Gold for June delivery fell 0.5 percent to $1,376.70 an ounce by 7:47 a.m. on the Comex in New York. Prices slid to $1,336.30 yesterday, the lowest since April 18, before rebounding. Futures trading volume was 31 percent above the average in the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London declined 1.1 percent to $1,378.80.
