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Gold Trades Below 1-Month High as Investors Weigh Demand Outlook

Jan. 14 (Bloomberg) -- Gold traded below a one-month high in New York on speculation physical demand may slow after prices rallied. Platinum slipped from the highest level since November.

The Bloomberg Dollar Spot Index, a measure against 10 major currencies, traded above yesterday’s lowest level this year before Charles Plosser from the Federal Reserve Bank of Philadelphia and Richard Fisher from the Dallas Fed speak today. Gold slid 28 percent last year, the most since 1981, partly on the outlook for less U.S. stimulus.

Bullion futures rebounded as much as 6.3 percent from a six-month low set Dec. 31 on signs of stronger physical demand. While the U.S. Mint said it sold more American Eagle gold coins so far this month than in all of December, the premium for immediate delivery in China, which probably overtook India as the largest consumer last year, fell since last week.

“Physical demand is very price-sensitive, especially at the retail level,” said Lv Jie, an analyst at Cinda Futures Co. “While that has helped gold hold up so far this year, we may see some of that demand drop off as prices climb.”

Bullion for February delivery lost 0.3 percent to $1,247.90 an ounce by 7:45 a.m. on the Comex in New York. It reached $1,255.30 yesterday, the highest price since Dec. 12. Futures trading volume was about the the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery fell 0.4 percent to $1,248.74 in London.

The U.S. Mint sold 63,000 ounces of American Eagle gold coins this month, topping the 56,000 ounces sold in all of December, the mint said yesterday in an e-mail. The U.K.’s Royal Mint said last week it ran out of 2014 Sovereign gold coins on “exceptional demand.”

ETP Holdings

Holdings in gold-backed exchange-traded products rose 0.2 metric ton yesterday to 1,746.4 tons, increasing from the lowest level since October 2009 and the first gain since November, data compiled by Bloomberg show.

Fed policy makers decided in December to cut monthly bond purchases to $75 billion from $85 billion. Deutsche Bank AG cut its 2014 gold forecast by 15 percent to $1,141 as reduced Fed stimulus, a stronger dollar and rising U.S. real interest rates curb demand for the metal, the bank wrote in a report today.

Silver futures for March delivery reached $20.49 an ounce, the highest since Nov. 20, and were last down 0.3 percent at $20.32. Palladium futures for March delivery fell 0.3 percent to $737.45 an ounce. Platinum for April delivery slipped 1.1 percent to $1,428.50 an ounce, after climbing to $1,447.50, the highest since Nov. 15.

The Association of Mineworkers and Construction Union, the most powerful labor group at the South Africa’s platinum mines, plans meetings with its members this week to test whether workers want to strike over pay. South Africa is the biggest producer of the metal.

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