Gold slides from week high, silver drops

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(Bloomberg) -- Gold fell from the highest level in more than a week as Chinese markets reopened after a holiday and investors awaited minutes from the Federal Reserve’s last meeting for clues on the timing of an interest rate increase. Silver fell the most since Sept. 28.

Bullion for immediate delivery lost as much as 0.4 percent to $1,140.68 an ounce and was at $1,144.64 by 3:21 p.m. in Singapore, Bloomberg generic pricing shows. Prices jumped to $1,153.75 on Wednesday, the highest since Sept. 25. Silver slumped as much as 2.9 percent to $15.5954 an ounce.

The Fed is scheduled to release the minutes from the Federal Open Market Committee’s Sept. 16-17 meeting on Thursday and holds two more policy meetings this year. The Shanghai Composite Index of shares climbed 3 percent, the most since Sept. 16, as trading resumed after a week’s holiday. Gold in Shanghai climbed 1.6 percent on Thursday, lagging a 2.7 percent increase in global prices in the past week when China was closed.

“We’re not getting as much support from the return of China as perhaps people would’ve thought,” Victor Thianpiriya, a Singapore-based analyst at Australia & New Zealand Banking Group Ltd., said by phone. “Premiums are lower than when China went on holiday. So we’re probably going to see gold head a bit lower in the short term.”

Premiums in Shanghai were about $1.60 an ounce compared with a little above $5 through most of September, signaling slightly weaker demand, Thianpiriya said. Bullion of 99.99 percent purity was at 234.14 yuan a gram ($1,146.53 an ounce) on the Shanghai Gold Exchange.

Expectations of a rate increase this year have been scaled back from 60 percent a month ago to 39 percent, according to Fed fund futures data compiled by Bloomberg. The odds rise to 60 percent for a move in March. Holdings in gold-backed exchange traded funds fell 1.19 metric tons to 1,529.55 tons as of Wednesday, down for a second straight day.

Silver surged 5.4 percent to 3,425 yuan a kilogram ($16.7717 an ounce) on the Shanghai Gold Exchange, less than an increase of more than 10 percent in global prices in the past week. Holdings in silver-backed exchange-traded funds fell to the lowest since July 2013 as of Wednesday, data compiled by Bloomberg show. Platinum lost 0.8 percent and palladium retreated 0.4 percent.