Gold Heads for Worst Streak Since 2009

Gold dropped for a seventh day, slumping to the lowest level since July, after minutes from a Federal Reserve meeting showed a debate over the risks and benefits of more stimulus. Platinum fell to a six-week low.

Gold for immediate delivery fell as much as 0.6 percent to $1,555.55 an ounce, the lowest since July 12, and traded at $1,562.50 by 1:27 p.m. Singapore time. A seventh day of losses would be the worst run since March 2009. Bullion for April delivery slumped as much as 1.5 percent to $1,554.30 on the Comex, the lowest price for futures since June 29.

Minutes of the Federal Open Market Committee’s Jan. 29-30 meeting showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke’s program of buying bonds. Some said an earlier end to purchases might be needed, while others warned against a premature withdrawal of stimulus.

“Gold is a risk indictor and it’s reacting like it should in a normal recovery scenario, meaning that the Fed will tighten because of growth, not because there’s inflation,” said Mikio Kumada, a Hong Kong-based global strategist for LGT Capital Partners, which oversees more than $20 billion. “That’s why gold is getting beaten up.”

Bullion climbed for a 12th straight year in 2012 as central banks from Europe to the U.S. and China boosted stimulus. Gold surged 70 percent as the Fed bought $2.3 trillion of debt in two rounds of easing from December 2008 through June 2011. The FOMC at its January meeting decided to continue $85 billion in monthly bond purchases.
U.S. Recovery

The metal has declined 6.7 percent this year on signs of an improving U.S. economy, the world’s largest. An index of U.S. leading indicators probably rose 0.2 percent in January, advancing for a second month, according to the median estimate of economists surveyed byBloomberg News before the release today. The Dollar Index (DXY), a gauge against the currencies of six trading partners, climbed to a three-month high. Gold usually trades counter to the U.S. currency.

India, the world’s biggest gold buyer, may increase import taxes for a second time this year as it seeks to narrow a widening current-account deficit, curbing demand for bullion in jewelry and investment, according to the All India Gem & Jewellery Trade Federation. The government will present its annual budget on Feb. 28.

Most-active futures dropped 0.9 percent to 29,324 rupees per 10 grams ($1,675.67 an ounce) on the Multi Commodity Exchange of India Ltd. Cash bullion of 99.99 percent purity fell 2.7 percent to 317.20 yuan a gram ($1,580.50 an ounce) on the Shanghai Gold Exchange.

Platinum for immediate delivery dropped as much as 1.8 percent to $1,617 an ounce, the lowest since Jan. 11, and traded at $1,625. Palladium fell as much as 1.6 percent to $726.95 an ounce, the cheapest since Jan. 25, and was at $728.70. Spot silver declined 0.3 percent to $28.47 an ounce. (bloomberg)