Gold Heads for Longest Slump in Six Weeks Before Fed’s Decision

Jan 29, 2014 5:11 am ET

Jan. 29 (Bloomberg) -- Gold headed for the longest losing streak in almost six weeks amid expectations that stimulus will be cut further as the U.S. Federal Reserve decides on monetary policy. Platinum fell in the the longest slump since June.

Fed policy makers conclude a two-day meeting today after data yesterday showed U.S. consumer confidence rose to a five- month high and durable goods orders fell the most in five months. The central bank will trim bond-buying by $10 billion at each meeting to end the program this year, according to the median of forecasts by economists in a Bloomberg survey. The Fed announced plans last month to taper monthly asset purchases to $75 billion from $85 billion.

“Bullion faces pressure from investor expectations that the Fed may announce another round of tapering to the asset- purchase program,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. Gold fell 28 percent last year as the U.S. recovered and the Fed prepared to pare stimulus.

Bullion for immediate delivery fell 0.1 percent to $1,255.15 an ounce at 10:09 a.m. in London, the third consecutive decline and longest slump since Dec. 19. Platinum dropped 0.3 percent to $1,406.13 an ounce, a fifth consecutive decline as the union leading a strike in South Africa said producers made proposals to resolve the dispute.

Futures trading in gold in New York was 50 percent higher than the average of the past 100 days at this time and platinum volume was 43 percent lower, data compiled by Bloomberg show. Gold for April delivery advanced 0.3 percent to $1,254.60 on the Comex in New York.

Silver increased 0.2 percent to $19.6158 an ounce and palladium rose 0.2 ercent to $718.25 an ounce, the first gain in seven days.

--Editors: Claudia Carpenter, Sharon Lindores