MINT

Gold drops on US stimulus worries, SPDR outflow

Spot gold fell 0.3% to $1,239.84 an ounce by 0022 GMT, after posting its biggest weekly loss in two months

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 4.50 tonnes to 852.21 tonnes on Friday, their lowest since February 2009. Photo: AFP

Singapore: Gold edged towards a four-month low on Monday on fears of an early end to US stimulus measures and as holdings in the biggest bullion-backed exchange-traded fund fell the most in three weeks.

Spot gold fell 0.3% to $1,239.84 an ounce by 0022 GMT, after posting its biggest weekly loss in two months.

The metal wasn’t too far from its four-month low of $1,236.29 hit last week.

Two Federal Reserve officials said on Friday that a debate over rolling back the bank’s bond-buying stimulus was on the table at the December policy meeting, raising fears that the Fed could begin tapering from next month.

The Fed’s $85 billion monthly bond purchases have boosted gold prices in recent years as they increase the metal’s inflation hedge appeal.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 4.50 tonnes to 852.21 tonnes on Friday, their lowest since February 2009. Is was the sharpest drop since 1 November.

Hedge funds and money managers cut bullish bets in futures and options of US gold and silver for the week ended 19 November, a report by the Commodity Futures Trading Commission showed on Friday.

Eligible gold stocks sitting inside US exchange warehouses have risen to a seven-month high, a sign that physical demand has weakened.

SUMIT KUMAR SINGH
PGDM 1ST YEAR