Gold falls as investors weigh Fed, physical demand

London, Sept 24. Gold today fell as investors weighed the outlook for slower US stimulus against speculation physical demand may strengthen before a Chinese holiday. Gold fell by 0.6 per cent to USD 1,315.08 an ounce and silver by 0.8 per cent to USD 21.47 an ounce. Bullion fell for a fourth week last week even after the US Federal Reserve unexpectedly refrained from slowing its USD 85 billion a month of bond buying. Economists said the Fed will take the first step in slowing its bond buying in December. Fed Bank of St Louis President James Bullard said tapering may start in October. Gold fell 21 per cent this year as some investors lost faith in the metal as a store of value on optimism economies are strengthening. Markets in China, last year's second-biggest gold consumer after India, will be shut for one-week on October 1 for the National Day holiday, also known as Golden Week. Holdings in gold-backed exchange-traded products fell 0.7 tonne yesterday to 1,932.4 tonnes, the lowest since May 2010.