Gold Extends Drop to Longest Slump in Three Months on U.S. Data

 Gold fell for a fifth day, heading for the longest slump in three months, after data showed U.S. manufacturing activity rose to a two-year high, boosting speculation the Federal Reserve will begin paring stimulus.

Bullion for immediate delivery dropped as much as 0.3 percent to $1,312.55 an ounce, and traded at $1,314.56 at 9:10 a.m. in Singapore. A decline today would be the longest losing run since the five days to Aug. 1. Prices retreated to $1,306 on Nov. 1, the lowest level since Oct. 17.

Gold tumbled 22 percent in 2013 as investors sold the metal at a record pace from exchange-traded products amid prospects for an economic recovery. The Fed last week maintained its $85 billion in monthly bond purchases, while noting that there are signs of “underlying strength” in the largest economy.

A Nov. 1 report showed the Institute for Supply Management’s manufacturing index for October rose to 56.4, the highest since April 2011, compared with 56.2 a month earlier and economists’ estimates for a decline to 55. Holdings in bullion-backed ETPs contracted 29 percent this year after gaining every year since the first product was listed in 2003.

Gold for delivery in December traded at $1,315 an ounce on the Comex in New York from $1,313.20 on Nov. 1, with trading volume 1.1 percent above the average for the past 100 days for this time of day.

Spot silver was at $21.8672 an ounce from $21.8825 on Nov. 1. Platinum added 0.1 percent to $1,456.32 an ounce, while palladium climbed 0.3 percent to $743.35 an ounce.

South Africa’s National Union of Mineworkers began a strike last night over wages at Northam Platinum Ltd. as the company said it has proposed a meeting between the sides tomorrow. The Association of Mineworkers and Construction Union has also failed to reach an agreement over wages with Lonmin Plc, Impala Platinum Holdings Ltd. and Anglo American Platinum Ltd., the world’s three largest platinum producers.

(Source: Bloomberg)