Gold futures fell the most in a week as a global equity rally cut demand for precious metals as alternative investments. Silver slumped to a three-month low, and palladium capped the biggest drop in six weeks.
The MSCI All-Country World Index of equities rose to the highest since January 2008. Investors awaited details of the last Federal Open Market Committee meeting to be published on Nov. 20. Janet Yellen, the nominee to replace Ben S. Bernanke as Federal Reserve chairman, signaled on Nov. 14 that she would continue record stimulus until the U.S. economy is stronger.
“Money is running toward equities,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “Also, people want more information about what the other Fed officials are thinking about tapering.”
Gold futures for December delivery fell 1.2 percent to settle at $1,272.30 an ounce at 1:56 p.m. on the Comex in New York, the biggest drop for a most-active contract since Nov. 8. The metal has slumped 24 percent this year.
Gold is poised for the first annual decline since 2000. Some investors lost faith in the metal as a store of value amid the equity rally and low U.S. inflation. Economists surveyed by Bloomberg News on Nov. 8 forecast that the Fed probably will delay reductions in bond purchases until March.
The net-long position in gold slumped 37 percent to 55,456 futures and options on the Comex in the week ended Nov. 12, U.S. Commodity Futures Trading Commission data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid-August.
Source:- bloomberg.com
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