Gold Trades Near 7-Week Low as Investors Weigh Stimulus Outlook

New York (Apr 1)  Gold traded near a seven-week low in London as investors weighed the outlook for the U.S. Federal Reserve to reduce stimulus.

Fed Chair Janet Yellen said yesterday that the U.S. will need monetary stimulus for “some time,” before data today that may show a gauge of manufacturing climbed last month. She said March 19 that the central bank may start raising the benchmark interest rate about six months after ending its bond-purchase program later this year.

Gold capped the first monthly decline this year, falling from a six-month set March 17 when Russia’s move to annex Crimea boosted demand for a haven. Russian President Vladimir Putin began withdrawing forces stationed on his neighbor’s border yesterday, with discussions between top U.S. and Russian diplomats during the past two days helping cool investors’ concerns over the crisis.

“The market is becoming increasingly sensitive to the U.S. macro numbers,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. “Now that geopolitical risks over Ukraine are fading, market participants will be looking forward to the U.S. jobs report” due April 4, he said.

Bullion for immediate delivery added 0.3 percent to $1,287.42 an ounce by 9:40 a.m. in London, according to Bloomberg generic pricing. It reached $1,278.20 today, the lowest since Feb. 11. Gold for June delivery rose 0.3 percent to $1,287.60 on the Comex in New York, where futures trading volume was 12 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed.