(For more on the gold bear market, see EXT5.)
Sept. 11 (Bloomberg) -- Gold prices fell to the lowest in almost three weeks after President Barack Obama asked Congress to delay a vote on U.S. military action against Syria, diminishing demand for haven assets.
Obama said yesterday he would prefer a peaceful solution to the Syrian conflict and that he saw “encouraging signs” of diplomacy ending the confrontation. Last month, gold jumped 6.3 percent partly amid concern that political tension in the Middle East would boost crude-oil prices, damping the economy and stoking inflation.
“The likelihood of a U.S. military attack on the Syrian regime continuing to decrease is very bearish for safe-haven assets like gold,” Jim Wyckoff, a senior analyst at Kitco Inc., a research company in Montreal, said in a report. “There is an increase in investor risk appetite worldwide.”
Gold futures for December delivery fell less than 0.1 percent to settle at $1,363.80 at 1:37 p.m. on the Comex in New York. Earlier, the price touched $1,356, the lowest for a most- active contract since Aug. 22.
Futures have dropped 19 percent in 2013 as some investors lost faith in the metal as a store of value amid an equity rally and low U.S. inflation. The price will extend a slump into next year, Goldman Sachs Group Inc. said.
“Gold prices have started to decline with the declining probability of a military intervention,” Goldman said in a report before Obama’s address. “We continue to expect that gold prices will decline into 2014 on the back of an acceleration in U.S. activity and a less accommodative monetary-policy stance.”
Silver futures for December delivery rose 0.7 percent to $23.172 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery fell less than 0.1 percent to $1,473.50 an ounce. The metal dropped for the third straight day, the longest slump in two months. Palladium futures for December delivery declined 0.2 percent to $691.20 an ounce.
--With assistance from Phoebe Sedgman in Melbourne. Editors: Patrick McKiernan, Thomas Galatola