Gold and silver slumped 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 $1,177.26 at 4:13 p.m. in Singapore. Silver slid as much as 3 percent to $16.0009 an ounce, the lowest since February 2010. They fell as the dollar rose 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.
Bullion is heading for a decline of 4.4 percent this week, the most since September 2013. The metal is also set for the first consecutive monthly loss in 2014. Holdings in the SPDR Gold Trust shrank for a third day to 741.2 metric tons yesterday, the least since Oct. 2008.
Gold rose 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent. Prices slumped 28 percent last year, the most in three decades, on expectation that the central bank will scale back its bond-buying program that was put in place to fuel growth while failing to stoke inflation.
The U.S. central bank, which has held its key rate at zero to 0.25 percent since 2008, this week cited an improving job market in deciding to end bond buying, while maintaining a commitment to keep rates low for a considerable time. It also said inflation is running below its 2 percent target.
Futures for December delivery fell as much as 2.7 percent to $1,166.20 an ounce on the Comex in New York, the lowest level since July 2010, before trading at $1,175.80.
Concern that demand may falter in the world’s largest users also hurt prices. China sent investigators to probe a seven-fold surge in September’s precious-metals exports. In India, the biggest consumer after China, imports are set to drop in October after a more than four-fold jump last month.
Gold of 99.99 percent purity on the Shanghai Gold Exchange, the benchmark, sank as much as 3.1 percent to 230.05 yuan per gram ($1,172.35 an ounce), the lowest level this year. Volumes tumbled to a one-month low today.
Silver for immediate delivery slid 2.4 percent to $16.1078 an ounce, set for a fourth monthly decline that’s the worst run since June 2013. An ounce of gold bought as much as 73.3154 ounces of silver today, the most since April 2009.
Spot platinum decreased as much as 1.8 percent to $1,223.05 an ounce, the lowest since Oct. 6. It’s heading for a fourth month of losses that’s the longest stretch since June 2013. Palladium slipped 0.1 percent to $779.67 an ounce.