Gold Swings Near One-Week High as Investors Weigh Fed Stimulus

Gold fluctuated near a one-week high as investors assessed the Federal Reserve’s commitment to maintain stimulus. Billionaire investor John Paulson kept his holdings in the largest bullion-backed exchange-traded fund.

Bullion for immediate delivery traded at $1,288.02 an ounce at 9:18 a.m. in Singapore after climbing to $1,294.42 yesterday, the highest since Nov. 8. Prices that are set for a third weekly loss advanced 1.5 percent in the two days through yesterday as Fed Chairman nominee Janet Yellen said she’s committed to promoting a strong economic recovery.

Gold lost 23 percent in 2013 amid speculation that the Fed will start to reduce the $85 billion-a-month of bond buying as the economy strengthens. Data yesterday showed more Americans than forecast filed applications for unemployment benefits last week as Yellen said she will ensure monetary stimulus isn’t removed too soon.

“Continuing ultra-accommodative monetary policies are supportive of gold prices,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “A lack of follow-through buying may leave gold vulnerable to a pull-back.”

Gold for delivery in December traded at $1,286.40 an ounce on the Comex in New York from $1,286.30 yesterday, when prices gained 1.4 percent, the most in three weeks. Trading volume was 41 percent below the average for the past 100 days at this time.

Paulson & Co., the largest investor in the SPDR Gold Trust, held 10.23 million shares as of Sept. 30, unchanged from June 30, according to a government filing yesterday. Assets in the SPDR have shrunk 36 percent this year as Paulson cut holdings by more than half in the second quarter.

Global bullion demand fell 21 percent in the third quarter as investors continued to dump holdings of the metal through exchange-traded funds and central banks slowed purchases, the World Gold Council said yesterday.

Spot silver fell 0.1 percent to $20.7768 an ounce and is 3.4 percent lower this week, heading for the biggest such decline in two months. Platinum gained 0.2 percent to $1,449.72 an ounce and palladium was little changed at $739.60 an ounce.

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