Gold fell for a second day in London on speculation that U.S. data will strengthen the dollar and boost the case for the Federal Reserve to slow stimulus. The ADP Research Institute may say today those private payrolls in the U.S. raised by 200K workers last month. The Federal Open Market Committee decided at the December 17-18 meeting to cut monthly bond purchases to $75 billion from $85 billion starting this month. Bullion slid 28% last year, the most since 1981, as some investors lost faith in the metal as a store of value. Prices rose as much as 5.6% since setting a six-month low on December 31, partly as physical demand increased in China.
Holdings in gold-backed exchange-traded products are at the lowest since October 2009. The Fed will probably reduce its bond purchases in $10 billion increments over the next seven meetings before ending the program in December 2014. Gold for fell 0.6% to $1,224.81 an. Bullion for February delivery lost 0.5% to $1,223.90, where futures trading volume was 17% below the average for the past 100 days for this time of day.