Gold swung between gains and losses as Cyprus denied it plans to sell bullion to ease its debt crisis and some investors reduced holdings on speculation that the U.S. Federal Reserve may scale back stimulus measures.
Several Fed officials said the central bank should begin tapering its quantitative easing program later this year and stop it by year-end, according to the minutes of their March meeting, released yesterday. Each month the Fed buys $85 billion of securities. Cyprus’s central bank hasn’t discussed any plan to sell gold reserves, the Nicosia-based institution said.
“From a sentiment point of view, it should remove some of the bearish feeling,” David Govett, head of precious metals at Marex Spectron Group in London, wrote in a report today, referring to Cyprus’s denial. “As with all things Europe the waters are far from clear. I suspect that if there are to be any gold sales, they will not happen for a while to come.”
Gold for June delivery was little changed at $1,559.40 an ounce by 7:06 a.m. on the Comex in New York after dropping as much as 0.4% and gaining as much as 0.2%. Bullion fell 1.8% yesterday. Gold for immediate delivery was 0.1% higher at $1,560.33 an ounce in London.
U.S. data on April 5 showed payrolls growth in the largest economy in March was the slowest in nine months. Fed Chairman Ben S. Bernanke said earlier this week that U.S. economic conditions aren’t what he’d like them to be.
Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, fell to 1,183.53 metric tons yesterday, the least since May 2010. Goldman Sachs Group Inc. yesterday cut forecasts for gold through 2014, saying the turn in the price cycle is accelerating on the U.S. economic recovery.
Near-term risk in gold is toward the $1,521 to $1,539 lows, Barclays Plc technical analysts Jordan Kotick and Lynnden Branigan wrote in a report e-mailed today.
Silver for May delivery slipped 0.3% to $27.58 an ounce. Platinum for July delivery traded 0.2% higher at $1,532.20 an ounce, and palladium for June delivery lost 0.1% to $720.10 an ounce.