Gold declined to the lowest price in almost two weeks in London amid speculation the U.S. Federal Reserve will slow bond purchases as the economy strengthens.
The metal fell the most in three weeks on June 7 after data showed U.S. employers took on 175,000 workers in May, beating the 163,000 median estimate in a Bloomberg survey. Fed policy makers will trim their so-called quantitative-easing program to $65 billion a month at their October meeting, from the current level of $85 billion, according to a separate Bloomberg survey.
“The latest U.S. employment data does not really change the status quo for weak investor sentiment,” Joni Teves, an analyst at UBS AG in London, wrote today in a report. “The fact that employment is holding up and continuing to hint at an improving environment, albeit gradual, reinforces optimism on the U.S. economy, which has been acting as an obstacle for gold.”
Gold for immediate delivery fell 0.3 percent to $1,370.04 an ounce by 10:01 a.m. in London. Prices reached $1,376.35, the lowest since May 28, after dropping 2.2 percent on June 7, the most since May 15. Bullion for August delivery was 0.3 percent lower at $1,378.70 on the Comex in New York. Futures trading volume was 28 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
Gold slid 18 percent this year as an improving U.S. economy increased speculation the Fed may scale back quantitative-easing measures that helped bullion cap a 12-year bull run in 2012. Alan Greenspan, a former Fed chairman, said on CNBC television last week that the central bank should move toward ending the monthly asset purchases.
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