Gold traded little changed below $1,200 an ounce as investor holdings retreated and U.S. equities climbed to a record amid signs of an improving economy.
Bullion for immediate delivery was at $1,198.18 an ounce at 8:03 a.m. inSingapore from $1,198.83 yesterday when prices dropped 0.4 percent. The price closed at $1,188.68 on Dec. 19, the lowest since Aug. 3, 2010, after theFederal Reserve said it will reduce stimulus. The contract for February delivery was little changed at $1,198.60 on the Comex in New York.
Gold tumbled 28 percent this year, set for the worst annual drop since 1981, as equities rallied and the Fed said it will cut monthly asset purchases to $75 billion from $85 billion. The Standard & Poor’s 500 Index rose 0.5 percent to close at a record yesterday after International Monetary Fund Managing DirectorChristine Lagarde said Dec. 22 the organization is raising its growth outlook for U.S. economy in 2014.
“Gold can expect little in the way of support from western investment markets,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note yesterday. “Positive consumer data undermines risk sentiment. Investors continue to lighten long positions, exit the gold exchange-traded funds or go outright short.”
Consumer spending in the U.S. rose in November by the most in five months, the Commerce Department said yesterday. Other data showed consumer sentiment climbed in December to a five-month high.