Gold holds near four-week low on india’s bullion plan before fed 

India’s government on Wednesday approved a gold monetisation plan and sale of sovereign bonds by the Reserve Bank of India

Gold held near a four-week low on concern that India will reduce bullion imports and as US jobs data added to the case for higher interest rates.

India’s government on Wednesday approved a gold monetisation plan and sale of sovereign bonds by the Reserve Bank of India. The country wants to tap metal held by households and temples in a bid to cut its reliance on imports. India vies with China as the world’s biggest gold buyer.

Bullion dropped 6.6 per cent this year on expectations the Federal Reserve will raise rates for the first time since 2006. US job openings surged to a record in July as hiring cooled, a sign employers are having a hard time finding workers. Traders estimate the probability of a rate increase next week at 28 per cent and the chances of a move by December at 59 per cent.

“The impact from India’s gold plan is probably going to be modest, but modest things can have a big impact on sentiment in the current environment,” Matthew Turner, an analyst at Macquarie Group Ltd. in London, said by phone. “Gold’s like a bicycle at the moment. If it doesn’t have positive momentum to keep it going, it falls over.”

Gold Price

Gold for immediate delivery lost 0.1 per cent to $1,106.49 an ounce by 11:27am in London, according to Bloomberg generic pricing. It reached the lowest since Aug. 11 on Wednesday. Futures for December delivery added 0.3 per cent to $1,105.40 on the Comex in New York.

The outlook for US rates are still the biggest driver for prices, Macquarie’s Turner said. The Fed will announce its next policy decision on Sept. 17.

Investors are holding the least gold through exchange- traded products in three weeks. Assets fell 4 metric tons to 1,517.5 tons, data compiled by Bloomberg as of Wednesday showed.

Silver for immediate delivery rose 0.6 per cent to $14.716 an ounce in London. Palladium climbed 1.6 per cent to $587.05 an ounce while platinum gained 0.7 per cent to $988.01 an ounce.