Gold set for second weekly gain on bets Fed to maintain stimulus

Delay expected to hold until March

Gold headed for a second weekly advance as weaker-than-forecast U.S. data and concern that growth was hurt by a government shutdown boosted speculation the Federal Reserve will delay a cut in stimulus.

Spot gold fell 0.2 percent to $1,344.47 an ounce at 9:19 a.m. in Singapore, trimming its weekly gain to 2.1 percent after a 3.5 percent climb in the prior period. That’s the best such run since the week ended Aug. 23. Prices advanced to $1,352.06 yesterday, the highest since Sept. 30. Gold for December delivery dropped 0.4 percent to $1,345.10 an ounce on the Comex.

Gold lost 20 percent this year amid speculation the Fed will curb stimulus measures. More Americans than forecast filed jobless claims, data showed yesterday. The 16-day government shutdown that started Oct. 1 probably trimmed 0.25 percentage point from fourth-quarter growth and cost 120,000 jobs this month, according to Jason Furman, President Barack Obama’s chief economic adviser.

“Tapering doesn’t look like it’s happening given a lot of the economic numbers we’ve had have been pretty negative,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney. “People are starting to reposition themselves for the lack of tapering and perhaps more stimulus.”

Fed policy makers unexpectedly refrained from slowing the monthly $85 billion bond purchases last month and economists surveyed by Bloomberg Oct. 17-18 said the central bank probably will delay a reduction in the stimulus until March.

Initial jobless claims decreased by 12,000 to 350,000 in the week ended Oct. 19, the Labor Department said yesterday, compared with 340,000 forecast in a Bloomberg survey.

Silver for immediate delivery was little changed at $22.7083 an ounce, set to climb 3.6 percent this week in the biggest advance since Aug. 16. Platinum lost 0.2 percent to $1,449.38 an ounce, trimming a second weekly gain. Palladium was little changed at $746.50 an ounce, set for a third weekly advance.

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