Gold Near Seven-Month Low After Fed Minutes; Platinum Declines

Gold swung between gains and losses 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 rose 0.2 percent to $1,567.71 an ounce at 3:46 p.m. in Singapore. The price earlier fell 0.6 percent to $1,555.55 an ounce, the lowest since July 12. Bullion for April delivery slumped as much as 1.5 percent to $1,554.30 an ounce on the Comex, the lowest price for futures since June 29, before trading at $1,567.10.

Minutes of the Federal Open Market Committee’s Jan. 29-30 meeting, released yesterday, 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 fell as much as 2.9 percent yesterday.

“Nothing has happened for the Fed to change,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “You’ve got to keep the stimulus programs at these levels so you can start to see” economic improvement, he said.

Bullion, down 6.3 percent this year, climbed for a 12th straight year in 2012 as central banks from the U.S. to 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.

Jobless claims in the U.S. may have increased to 355,000 in the week ended Feb. 16 from 341,000 a week earlier, according to economist estimates before a Labor Department report today. Total housing starts dropped to an 890,000 rate, lower than forecast, a report showed yesterday.
India Taxes

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 0.4 percent to 29,465 rupees per 10 grams ($1,681.23 an ounce) on the Multi Commodity Exchange of India Ltd. Cash bullion of 99.99 percent purity fell 2.2 percent to 318.90 yuan a gram ($1,589.21 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 $1,632.20. Palladium fell as much as 1.6 percent to $726.95 an ounce, the cheapest since Jan. 25, and was at $730.65. Spot silver gained 0.3 percent to $28.6375 an ounce after dropping 0.7 percent. (bloomberg)