Gold snaps 3-day loss as biggest drop in month may lure buyers

Platinum and palladium climbed

Gold advanced, trimming the first weekly loss in three, as the biggest price drop in a month may have lured buyers. Platinum and palladium climbed.

Bullion for immediate delivery gained as much as 0.3 percent to $1,326.80 an ounce, and traded at $1,326.25 at 9:06 a.m. in Singapore. Prices that fell 1.6 percent yesterday, the most since Oct. 1, are down 1.8 percent this week on speculation the Federal Reserve will pare stimulus sooner than expected.

The U.S. central bank said this week there are signs of “underlying strength” in the largest economy even as policy makers maintained the $85 billion-a-month in bond buying, signaling the possibility of reduced purchases as soon as December, according to Citigroup Inc. and Barclays Plc. Economists surveyed by Bloomberg Oct. 17-18 had predicted the Fed would begin tapering stimulus in March.

“While monetary policy remains accommodative, the downside may be limited for now,” said Mark To, head of research at Wing FungFinancial Group, a Hong Kong-based trader and refiner. While the Fed’s decision to stand pat this time was expected, what policy makers said had some Fed watchers speculating that a policy change could come sooner than expected, To said.

Gold tumbled 21 percent in 2013 after rallying for 12 years, as unprecedented money printing failed to spur inflation and as investors sold metal at a record pace from exchange- traded products. Assets in bullion-backed ETPs contracted for a 10th month in October and are down 29 percent this year after climbing every year since the first product was listed in 2003.

Trading Volume

Gold for delivery in December traded 0.2 percent higher at $1,326 an ounce on the Comex in New York after dropping 1.9 percent yesterday. Trading volume was 66 percent below the average for the past 100 days for this time of day.

Spot silver added 0.3 percent to $21.9785 an ounce after slumping 3.7 percent yesterday. The metal is still heading for a weekly loss. Platinum rose 0.3 percent to $1,453.43 an ounce and is little changed this week. Palladium climbed 0.3 percent to $739.40 an ounce.

South Africa’s National Union of Mineworkers said it would strike at Northam Platinum Ltd. Nov. 3, while Solidarity rejected an offer by Lonmin Plc. Members of the Association of Mineworkers and Construction Union voted on Oct. 28 to strike at Impala Platinum Holdings Ltd.’s operations.

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