Gold Trades Above $1,400 as Investors Weigh Fed Against Syria

     

         Gold traded little changed above $1,400 an ounce after rising the most in a week, as investors weighed the prospects for reduced stimulus in the U.S. against the threat of a military attack against Syria.

Spot gold traded at $1,412.97 an ounce at 11:49 a.m. in Singapore from $1,412.42 yesterday, when prices climbed 1.5 percent, the most since Aug. 23. Gold capped the first back-to-back monthly gain in a year in August as turmoil in the Middle East fanned haven demand.

Bullion fell 16 percent this year on speculation the Federal Reserve will taper stimulus that helped the metal gain for a 12th year in 2012. The U.S. central bank will start to reduce its $85 billion in monthly asset purchases, a program known as quantitative easing, at a meeting on Sept. 17-18, according to 65 percent of economists in a survey last month.

“Tension around Syria will be the near-term driver of gold prices,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “Recent U.S. economic data reflects a recovery, which should increase expectations for tapering of QE.”

The Bloomberg U.S. Dollar Index rose to a seven-week high after reports yesterday showed manufacturing in the U.S. climbed in August to the strongest since June 2011. U.S. House of Representatives Speaker John Boehner and Majority Leader Eric Cantor backed PresidentBarack Obama’s call for a military strike against Syria.

Gold for December delivery traded at $1,412.80 an ounce on the Comex in New York from $1,412 yesterday, when futures gained 1.1 percent, the most since Aug. 27.

Silver fell 0.5 percent to $24.149 an ounce. Platinum and palladium were little changed at $1,535.65 an ounce and $718.25 an ounce.