Gold slips as stocks rise ahead of Fed, Bank of Japan meetings

Demand for safe-haven metal falls after G20 summit pledges to boost growth

Gold fell yesterday, extending a second straight week of losses, as a recovery in risk appetite supported stock markets near nine-month highs ahead of central bank meetings this week in the United States and Japan.

The world’s major economies pledged at a G20 meeting this weekend, dominated by last month’s British vote to leave the European Union, to use all policy tools available to boost growth.

That lifted both shares and the dollar, weighing on gold.

Spot gold was down 0.5 per cent at $1,314.87 an ounce at 0935 GMT, while US gold futures for August delivery were down $8.60 an ounce at $1,314.80.

Gold eased for a second week last week, by 1.2 per cent, after rallying to its highest in more than two years in early July in the wake of the Brexit vote, which drove up demand for the metal as a haven from risk.

“At the moment gold is struggling a bit because there is lower safe-haven demand, and at the same time you have the Fed (meeting) coming up, which is making people a bit more cautious,” ABN Amro analyst Georgette Boele said.

“You have these massive speculative positions still out there, and they are vulnerable if the Fed is more hawkish than expected.”

Speculators cut their record bullish bets on COMEX gold futures and options for a second straight week, taking the total to its lowest in a month, US Commodity Futures Trading Commission (CFTC) data showed.

Silver was down 0.8 per cent to $19.45. Platinum was down 0.3 per cent $1,073 an ounce.

Palladium, which hit a nearnine month high on Friday, was down 1 per cent at $673.47.