Gold headed for the first monthly decline this year as signs of a U.S. recovery backed the case for the Federal Reserve to press on with reducing stimulus. Palladium was poised to advance for a second month.
Bullion for immediate delivery traded at $1,297.30 an ounce at 8:53 a.m. in Singapore, according to Bloomberg generic pricing. Gold ended at $1,295.23 on March 28 when prices fell to $1,285.82, the lowest since Feb. 12. The metal rose 8 percent this year, reaching a six-month high on March 17, as Russia’s annexation of Crimea spurred haven demand.
Gold fell 2.2 percent this month as U.S economic data including durable goods orders beat estimates, while Fed Chair Janet Yellen said that the central bank’s debt-buying program may end this year with interest rates starting to rise in 2015. The Fed cut monthly asset purchases by $10 billion at the last three meetings.
“Yellen alluded to a rate hike which has pressured gold lower, but investors should remember that while data is improving, the U.S. economy is still far from strong,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said from Shanghai. “While tension between Russia and Ukraine still exist, it isn’t rising for now and that’s also hurt sentiment toward gold.”
Gold for June delivery added 0.2 percent to $1,297.20 an ounce on the Comex in New York, down 1.9 percent in March. Holdings in gold-backed exchange-traded products were set for the first back-to-back monthly expansion after contracting for 13 months through January.
Palladium for immediate delivery slid 0.1 percent to $774.25 an ounce, trimming a 4.2 percent advance this month. The metal is up 8.1 percent this year on concern that more sanctions by the U.S. and the European Union against Russia and a strike at South African mines will reduce supplies. The countries are the largest suppliers of the metal.
U.S. Secretary of State John Kerry said after meetings yesterday in Paris with his Russian counterpart Sergei Lavrov that Russia must pull its forces back from Ukraine’s border as a first step toward de-escalating the political crisis.
Spot silver rose 0.3 percent to $19.8935 an ounce. While the metal is down 6.3 percent in March, it is 2.2 percent higher this year. Platinum increased 0.6 percent to $1,417.63 an ounce, trimming the first monthly drop in four months.
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