Gold Swings Near Three-Week Low as Obama Seeks Syria Delay
NEW YORK (Sept 11) Gold swung between gains and losses, reaching the lowest in almost three weeks, after U.S. President Barack Obama asked Congress to delay a vote on military action against Syria, diminishing demand for a haven.
Bullion dropped 4.8 percent from a three-month high at the end of August when the U.S. said Syria should be held accountable for its alleged use of chemical weapons. Obama said he would prefer a peaceful solution to the Syrian conflict and that he saw “encouraging signs” of diplomacy ending the confrontation. He said he’s asked Congress to postpone a vote on a military strike.
Gold fell 18 percent this year as some investors lost faith in the metal as a store of value and on speculation the Federal Reserve will curb stimulus. Fed policy makers will cut monthly debt purchases by $10 billion at the Sept. 17-18 meeting a Sept. 6 Bloomberg News survey showed. Bullion will extend a drop into next year, Goldman Sachs Group Inc. said.
“For the time being at least, the Syrian crisis is averted,” David Govett, head of precious metals at Marex Spectron Group in London, said today in an e-mail. “For now, it would seem that the ‘war premium’ has gone. Now we are left with the Federal Open Market Committee meeting next week, where it seems that most people are looking for some sort of quantitative-easing tapering.”
Gold for immediate delivery added 0.3 percent to $1,367.95 an ounce by 9:34 a.m. in London. Prices rose as much as 0.4 percent and fell as much as 0.6 percent, reaching $1,356.35, the lowest level since Aug. 22. Bullion for December delivery was up 0.2 percent at $1,367 on the Comex in New York. Futures trading volume was 23 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Chemical Weapons
Obama said yesterday from Washington that he will pursue a proposal by Russia to have Syria surrender its chemical weapons to international authorities. He had previously said he would ask Congress to authorize the use of military force against Syrian President Bashar al-Assad following an Aug. 21 chemical attack that the U.S. says killed more than 1,400 people.
“Gold prices have started to decline with the declining probability of a military intervention,” Goldman analysts including Jeffrey Currie wrote in a report, issued before Obama’s address. “We continue to expect that gold prices will decline into 2014 on the back of an acceleration in U.S. activity and a less accommodative monetary-policy stance.”
Holdings in gold-backed exchange-traded products declined 2.2 metric tons yesterday to 1,948.6 tons, data compiled by Bloomberg show. Assets are 1.7 tons above a three-year low set Aug. 8.
Silver for immediate delivery rose 0.6 percent to $23.11 an ounce in London, after falling to $22.7739, the lowest since Aug. 22. Platinum gained 0.6 percent to $1,481.60 an ounce. Palladium was 0.7 percent higher at $698.50 an ounce.
