Gold futures fell to a three-week low on speculation that the Federal Reserve may signal a reduction of U.S. economic stimulus. Palladium dropped to the cheapest in more than a month as European car sales plunged.
Gold holdings through exchange- traded products will probably drop another 285 metric tons this year as prices fall further on speculation the U.S. economic recovery will mean less stimulus, Societe Generale SA said.
Best-performing precious metal palladium is holding up better than most analysts anticipated in the annual London Bullion Market Association survey while gold, silver and platinum have surprised every forecaster.
Gold traders turned bearish for the first time in a month as investors reduced holdings in exchange- traded products for an unprecedented 17th consecutive week and India, the biggest buyer, announced curbs on imports.
Silver is punishing investors amid diminishing trust in precious metals as a store of wealth and concern that growth is weakening, with $5.2 billion erased from the value of their near-record holdings this year.