Gold Trades Near Four-Month Low Before ECB Meeting

Bloomberg: Gold held near a four-month low as investors awaited a European Central Bank meeting at which policy makers may add to stimulus and a U.S. labor report that may back further cuts to the Federal Reserve’s bond purchases. Platinum retreated to the lowest in more than three weeks.

Gold for immediate delivery traded at $1,245.90 an ounce at 2:12 p.m. in Singapore from $1,244.95 yesterday, according to Bloomberg generic pricing. The metal fell to $1,240.73 yesterday, the lowest level since Jan. 31, before rebounding as the Standard & Poor’s 500 Index retreated from a record and the euro rose from a three-month low against the dollar.

Gold fell 3.3 percent in May, the biggest monthly drop this year, as the euro weakened 1.7 percent versus the dollar on speculation that the ECB will add stimulus when policy makers meet tomorrow. A June 6 report is forecast to show employers added 215,000 jobs in the U.S., just above this year’s average, backing the case for the Fed to further reduce asset purchases as the economy recovers.

“Gold clawed its way higher as the equity markets edged lower from recent highs and the euro ticked higher,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “It appears that most investors are waiting for the ECB policy meeting and the U.S. monthly payroll numbers before committing too heavily to gold, in either direction.”

Since May 29, gold’s 14-day relative-strength index has been below the level of 30 that suggests a potential rebound to some analysts who study technical charts.

Gold for August delivery traded at $1,246.10 an ounce on the Comex in New York from $1,244.50 yesterday, when prices halted a six-day losing run that was the longest since August.

Platinum for immediate delivery fell as much as 0.3 percent to $1,427 an ounce, the lowest level since May 12, on speculation an 18-week strike in South Africa, the biggest producer, may soon be resolved. A fourth day of losses would be the longest streak since March.

Spot silver rose 0.2 percent to $18.8516 an ounce. Palladium declined 0.3 percent to $835.80 an ounce.

reporter on this story: Glenys Sim in Singapore