Gold Drops Below $1,200 an Ounce for First Time Since June

December 20, 2013 Leave a comment

Gold Drops Below $1,200 an Ounce for First Time Since June

Gold fell below $1,200 an ounce in London and New York for the first time since June as an improving U.S. economy prompted the Federal Reserve to cut stimulus and reduced demand for precious metals as alternative assets.Bullion declined as much as 1.5 percent to $1,199.63 an ounce in London trading, the lowest since June 28. Bullion for February delivery fell as much 3 percent to $1,198 on the Comex in New York on trading volume that was double the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Prices are down 28 percent this year, heading for the first annual drop in 13 years.

The Fed said yesterday it will cut monthly bond purchases to $75 billion from $85 billion, citing an improved outlook for the U.S. employment market ahead of jobless-claims data today.

Prices tumbled as much as 38 percent in London since reaching a record in September 2011 as the U.S. economic recovery gained momentum. Global equities have advanced to the highest in almost six years, and U.S. inflation is running at 1.2 percent.

Gold rose 70 percent from December 2008 to June 2011 as the Fed expanded its balance sheet through debt purchases, fueling expectations of accelerated inflation and a weaker dollar. Investor appetite for the precious metal waned this year as inflation failed to accelerate and the S&P 500 Index of shares reached all-time highs.

Gold was 1 percent lower at $1,205.71 an ounce in London trading by 9:01 a.m. Silver for immediate delivery fell 2.2 percent to $19.3055 an ounce. In New York, gold futures were 2.6 percent lower at $1,203.40 an ounce.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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