By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold looked set to snap a three-day winning streak on Monday, but prices held near $1,300 per ounce on hopes the U.S. Federal Reserve would stick to its easy monetary policy, burnishing the metal's appeal as a hedge against inflation.
Spot gold had eased 0.2 percent to $1,287.11 an ounce by 0335 GMT. Prices rose nearly 2 percent in the previous three sessions, underpinned by expectations that the nominee to lead the Fed, Janet Yellen, would continue the bank's $85 billion in monthly bond purchases in that role.
"I think markets have already priced in Yellen's nomination and the tapering being pushed to next year," said Songwut Apirakkhit, managing director of Globlex Holding Management in Bangkok.
"As long as prices are still below $1,300, we think gold is in a bear market. We will change our view to neutral if the price goes above that level."
Bullion has lost nearly 25 percent of its value so far this year on fears the gold-friendly bond purchases would be cut back as the U.S. economy improves.
Last week, Yellen - who if confirmed by the Senate will take over from Fed chairman Ben Bernanke at the end of January - made plain she would press forward with the central bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.
But price gains after those comments have lost some momentum as charts show the metal is seeing resistance around $1,290 an ounce.
"Technically, the gold price is likely to meet strong resistance once at $1,295 and ... at $1,300," Phillip Futures said in a note.
Hedge funds and other speculators pulled money out of gold for a third straight week to reduce bullish bets they had staked on U.S. commodities. The size of the reductions was the largest in such a period since March, data issued on Friday showed.
Silver and palladium tracked gold lower, while platinum was supported by strikes in some South African mines.
(Reporting by A. Ananthalakshmi; Editing by Himani Sarkar and Joseph Radford)
- Commodity Markets
- USA News
- Janet Yellen