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Gold ends up on dollar fall, breaks four-day drop

Source : REUTERS
Last Updated: Thu, Nov 14, 2013 03:27 hrs
Shopping for ​Gold

Gold prices eked out a small gain on Wednesday to snap a four-day losing streak, boosted by a drop in the dollar and bargain hunting with prices near a one-month low.

The precious metal trimmed some of its gains later in the New York session as the 0.5 percent gain in the S&P 500 equities index to an intraday high dented gold's safe-haven appeal. A two-percent drop in copper prices also pressured gold.

In the absence of U.S. economic data, bullion investors awaited comments from Fed policymakers, including Chairman Ben Bernanke, due to speak at 7:00 p.m. EST (0000 GMT), for clues on the longevity of the Fed's stimulus.



Bernanke's speech comes on the heels of divergent remarks by several other Fed officials.

Minneapolis Fed President Narayana Kocherlakota said Tuesday monetary policy should remain accommodative, but Atlanta Fed President Dennis Lockhart did not rule out a decision to taper the bond-buying stimulus at the December policy meeting, though he also said the Fed should keep policy very easy.

The precious metal fell 1 percent in the previous session, and lost nearly 4 percent in the past four days.

"Gold's negative price reaction to the possibility of a December Fed tapering indicates to us that the bullion market is likely to remain sensitive to expectations for changes in monetary policy," said James Steel, chief metals analyst at HSBC.

Spot gold gained 0.2 percent to $1,269.84 an ounce by 2:22 p.m.

U.S. Comex gold futures for December delivery underperformed spot gold, settling down $2.80 at $1,268.40 an ounce. Trading volume was 20 percent below its 250-day average, preliminary Reuters data showed.

Investors now switch their focus to comments that Fed Chairman nominee Janet Yellen will make at her U.S. Senate confirmation hearing on Thursday, watching for any clues about monetary policy.

Silver dropped 1 percent at $20.49 an ounce after dropping 3 percent in the previous session to a four-week low.

In physical market news, the U.S. Mint's 2013 American Eagle silver bullion coin sales on Tuesday rose to a record high, highlighting retail investors' strong appetite for silver physical products.

Silver prices should be underpinned by improving industrial demand in 2014, but they will follow gold lower if the U.S. Federal Reserve begins tapering its stimulus, a top analyst at metals consultant Thomson Reuters GFMS said on Tuesday.

Platinum was down 0.3 percent at $1,425.90 an ounce and palladium fell 1 percent to $729.75 an ounce.

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