Gold Declines to Six-Month Low on Signs of Economic Improvement

Gold slid to a six-month low in the worst losing streak in almost four years in London as signs of economic improvement curbed demand for a protection of wealth. Silver fell to the lowest since August and platinum dropped.

Gold dropped for a sixth session as global equities reached the highest since June 2008. The Federal Reserve will publish minutes of its Jan. 29-30 policy meeting today and Labor Department data on producer prices today and on consumer costs tomorrow will show inflation is in check, economists surveyed by Bloomberg said.

“Bullion’s safe-haven properties as well as its traditional use in inflation hedges are irrelevant at this point,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote in a report. “The market’s attention is set to turn to the Federal Open Market Committee’s January minutes.”

Gold for immediate delivery fell as much as 0.9 percent to $1,590.92 an ounce, the lowest since Aug. 15, and was at $1,595.44 by 11:24 a.m. in London. A sixth straight drop would be the longest run since March 2009. Futures for April delivery lost 0.6 percent to $1,594.60 on the Comex in New York.

Futures trading volume was 36 percent above the average in the past 100 days for this time of day. Bullion at the morning “fixing,” used by some mining companies to sell output, was at $1,602 in London, down from $1,607.75 yesterday afternoon.

There’s “strong” physical gold-buying interest from China, Australia & New Zealand Banking Group Ltd. said in a report today. China was the second-largest bullion buyer last year, after India, the London-based World Gold Council estimates. Asian markets were closed last week for Lunar New Year holidays.

The Fed said Jan. 30 it would continue to buy $85 billion of Treasuries and mortgage-backed securities a month to support U.S. economic growth. Minutes of the FOMC’s Dec. 11-12 meeting showed members had split between wanting to finish bond purchases in the middle or at the end of the year.

Silver for immediate delivery fell 0.8 percent to $29.2388 an ounce in London, after sliding to $29.18, the lowest since Aug. 21. Palladium lost 0.6 percent to $759.75 an ounce. Platinum slumped 1.1 percent to $1,674.30 an ounce. (bloomberg)