Gold tumbles with silver to lowest since ’10 as dollar advances
By Bloomberg
Gold and silver fell to the lowest level since 2010 as the dollar strengthened after the Bank of Japan unexpectedly boosted unprecedented stimulus and the Federal Reserve ended asset purchases.
Bullion for immediate delivery lost as much as 2.6 percent to $1,167.49 an ounce, the lowest since July 2010, and traded at $1,171.10 at 3:27 p.m. in Singapore, according to Bloomberg generic pricing. Prices extended their decline as the dollar advanced to the highest in more than six years against the yen.
The Fed is weighing the timing of interest-rate increases as other central banks add to stimulus to boost their economies. The Bank of Japan said it's targeting an 80 trillion yen ($726 billion) expansion in the monetary base, up from 60 to 70 trillion yen before. Gold yesterday erased the year's advance after U.S. gross domestic product beat estimates and China probed a surge in precious-metals exports.
"People are generally looking at the direction of the dollar, which moved higher against the yen after the BOJ announcement, although the news itself is neutral for gold," said Wallace Ng, a Shanghai-based trader at Gemsha Metals Co. "A higher dollar depresses prices and sentiment in the gold market was already weak because of the Fed."
Bullion has retreated 3 percent this month after tumbling 6.2 percent September. Holdings in the SPDR Gold Trust shrank for a third day to 741.2 metric tons yesterday, the least since October 2008.