Gold extends drop to three-week low on outlook for US stimulus

LONDON: Gold today declined for a fourth day to a three-week low on speculation a strengthening US economy will spur the Federal Reserve to slow stimulus. Silver reached the lowest in four weeks.

Gold fell 0.2 per cent to USD 1,280.64 an ounce, after touching USD 1,276.58, the lowest since October 17. Silver also slid 1 per cent to USD 21.15 an ounce, a lowest since October 15.

The US Dollar Index, a measure against 10 major currencies, reached an eight-week high. US employers added a higher-than-expected 204,000 workers last month, Labor Department said.

Global equities are trading about 1.7 per cent below a more than five-year high reached October 30.

Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value and on speculation a strengthening economy will spur the Fed to slow debt purchases.

Holdings in gold-backed exchange-traded products increased for a fourth day, rising 0.1 tonne to 1,876.7 tonnes.