Gold near 34-month low as quarterly slump may spur demand

London, Jun 28. Gold today traded near a 34- month low as the worst quarterly slump in at least nine decades following the Federal Reserve’s comments on tapering stimulus may spur more physical demand. Gold added 0.2 per cent to USD 1,202.70 an ounce, after reaching 1,180.50 dollar, a lowest since August 3, 2010. Silver rose 1.9 per cent to 18.84 dollar an ounce, after reaching USD 18.22, the lowest since August 2010. It's down 33 per cent this quarter, the most since 1980. Gold dropped 25 per cent this quarter, its biggest loss since at least 1920. Fed Chairman Ben S Bernanke said that the Fed may begin tapering its bond-buying programme this year. U.S. data may show today that consumer sentiment improved and business activity expanded, economists said. Bullion slid 28 per cent this year, the biggest annual drop since 1981, after rallying the past 12 years. About USD 62.4 billion was wiped from the value of precious metals exchange-traded product holdings this year as some investors lost faith in them as a store of value. A lack of accelerating inflation and mounting concern about the strength of the global economy is hurting silver, platinum and palladium, which are used more in industry than gold. Gold entered a bear market in April, extending the retreat from its all-time high of 1,921.15 dollar in September 2011. Price declines accelerated this year as US bond yields increased and the dollar strengthened. Analysts from Morgan Stanley to Credit Suisse Group AG to Goldman Sachs Group Inc cut gold forecasts this month on prospects for reduced asset purchases.