Gold's slide persists as investors seek 'clarity' from Fed

Print
Font Size:
Default font size
Larger font size

Posted: Tuesday, January 8, 2013 12:00 am

Gold futures declined for the third straight session on signs that Federal Reserve policy makers may end monthly purchases of U.S. debt this year.

The drop Monday followed the longest run of weekly declines since May 2004. Thursday, minutes from the Fed showed $85 billion in monthly bond purchases, the third round of so-called quantitative easing, probably will end sometime in 2013. Gold gained 5.1 percent in September when the central bank announced the stimulus measures.

“The market is lackluster since people want some clarity from the Fed,” said Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago.

Gold futures for February delivery fell 0.2 percent to settle at $1,646.30 an ounce on the Comex in New York. Friday, the price touched $1,626, the lowest for a most-active contract since Aug. 21. Last week, the metal dropped 0.4 percent, the sixth straight weekly decline. In the previous two sessions, the commodity slumped 2.4 percent.

“The reaction looks overdone,” analysts at Macquarie Group Ltd. wrote Monday in a report. “The Fed has said it will maintain its bond purchases until there is a substantial recovery in the labor market. Friday's employment report, showing December's unemployment rate unchanged on November, was a reminder that this could take some time.”

However, the top forecaster in the London Bullion Market Association's 2012 poll said gold's 12-year bull market is over as U.S. economic growth means investors will switch focus to precious metals that benefit from expansion.

“I think America will sort itself out and the economy will start moving again, positively,” said Rene Hochreiter, chief executive officer of Johannesburg-based Allan Hochreiter (Pty) Ltd. “As gold declines, as the world economy improves, so will the industrial side, and platinum, palladium and silver will start to pick up.”

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.


loading...

SPOTLIGHT »

Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.