News Article from Bloomberg:Updated: New York, Apr 30...

News Article from Bloomberg:

Updated: New York, Apr 30 09:09London, Apr 30 14:09Tokyo, Apr 30 22:09

RESOURCES

Gold Falls to Three-Month Low in London as Investors Sell Metal

By Rachel Graham

April 30 (Bloomberg) -- Gold fell to a three-month low in London on signs that investors are selling metal held through exchange-traded funds. Platinum and silver also dropped.

StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, fell by 10.7 metric tons to 580.45 tons yesterday, according to data on the company's Web site. The trust held 641.82 tons at the start of last week.

``There is more and more focus on the outflow from ETFs,'' said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Hanau, Germany-based Heraeus Metallhandels GmbH.

Gold for immediate delivery fell $5.82, or 0.7 percent, to $864.68 as of 11:41 a.m. in London. The metal earlier dropped to $862.79, the lowest compared with intraday prices since Jan. 22. Futures for June delivery declined $10.40, or 1.2 percent, to $866.40 in electronic trading on the Comex division of the New York Mercantile Exchange.

Gold will trade at $850 within a month and $800 in three months, UBS AG said in a report today. The bank had previously forecast $900 and $850 respectively. It had already cut its estimates on April 23.

The declines in ETF holdings ``suggest that longer term gold holders are exiting long positions, perhaps rotating back into equities,'' UBS analyst John Reade said in a report today.

The Federal Reserve will announce its decision on interest rates today. Futures contracts on the Chicago Board of Trade show there's an 80 percent chance that the central bank will cut the target for overnight lending.

``A combination of rising inflation and low interest rates should remain positive for gold,'' said Daniel Sacks, a fund manager at Investec Asset Management in Cape Town.

`Resolutely Bullish'

``The innumerable factors that have taken gold to a fourfold increase over the last years remain very much in place, and more so,'' Ross Norman, joint managing director of FastMarkets Ltd. in London and a former bullion trader, said in a report today. ``I remain resolutely bullish for gold.''

Silver for immediate delivery fell 10.5 cents, or 0.6 percent, to $16.45 an ounce. Platinum dropped $10.75, or 0.6 percent, to $1,916.25 an ounce and palladium declined $5.50, or 1.3 percent, to $416 an ounce.

Anglo Platinum Ltd., the company that mines a third of the world's supply of the metal, said output will rise at least 5 percent this quarter as production rebounds from power cuts and floods. The Johannesburg-based company said yesterday that first- quarter output plunged 24 percent from a year earlier after flooding at its Amandelbult mine in South Africa in January.