Gold Snaps 3-Day Loss as Biggest Drop in Month May Lure Buyers

Gold advanced, trimming the first weekly loss in three, as the biggest price drop in a month may have lured buyers. Platinum and palladium climbed.

Bullion for immediate delivery gained as much as 0.3 percent to $1,326.80 an ounce, and traded at $1,326.25 at 9:06 a.m. in Singapore. Prices that fell 1.6 percent yesterday, the most since Oct. 1, are down 1.8 percent this week on speculation the Federal Reserve will pare stimulus sooner than expected.

The U.S. central bank said this week there are signs of “underlying strength” in the largest economy even as policy makers maintained the $85 billion-a-month in bond buying, signaling the possibility of reduced purchases as soon as December, according to Citigroup Inc. and Barclays Plc. Economists surveyed by Bloomberg Oct. 17-18 had predicted the Fed would begin tapering stimulus in March.

Gold tumbled 21 percent in 2013 after rallying for 12 years, as unprecedented money printing failed to spur inflation and as investors sold metal at a record pace from exchange-traded products. Assets in bullion-backed ETPs contracted for a 10th month in October and are down 29 percent this year after climbing every year since the first product was listed in 2003.

(Source: Bloomberg)