VINACHEM

Gold extended the biggest weeklyretreat since November on speculation that U.S. interest rateswill increase next year, curbing demand for the metal as a storeof value. Silver fell to the lowest level in almost six weeks.

Bullion for immediate delivery lost as much as 0.7 percentto $1,325.05 an ounce and was at $1,328.39 at 2:04 p.m. inSingapore. Prices dropped 3.5 percent last week, the most sincethe period ended Nov. 22. Gold for June delivery slid 0.5percent to $1,329.30 an ounce on the Comex in New York.

The Federal Reserve announced its third $10 billion cut inmonthly bond purchases last week as Chair Janet Yellen saidbenchmark interest rates may rise about six months after theasset buying ends, expected later this year. While gold rallied10 percent in 2014 on concern U.S. growth may be faltering andamid tension in Ukraine, Goldman Sachs Group Inc. predictsfurther declines as the world’s largest economy rebounds.

Investors are “not so concerned about the tapering partbut rising U.S. interest rates,” said David Lennox, a resourceanalyst at Fat Prophets in Sydney. “Yellen’s comments will nowbe in the back of investors’ minds until we get into 2015.”

Economic momentum in the U.S. shows further improvement,according to Michael Haigh, head of commodities research atSociete General SA, who reiterated a bearish outlook on gold forthis year. Goldman’s Jeffrey Currie, head of commoditiesresearch, said this month that the chances are increasing themetal will drop below $1,000 an ounce.

‘Profitable Trade’

“Gold began to move south again as macro funds liquidatedwhat has proven to be a fairly profitable trade in recentweeks,” Morgan Stanley analysts led by Adam Longson wrote in areport today. “The change in tone from the Fed on the timing ofthe tightening cycle prompted another leg down.”

Silver for immediate delivery fell as much as 1.1 percentto $20.1017 an ounce, the lowest price since Feb. 11, and was at$20.208. Platinum advanced 0.3 percent to $1,439.25 an ounce,rebounding from a second weekly decline.

Palladium was at $793.51 an ounce from $794.50 at the endof last week. The metal advanced to $799 on March 21, thehighest level since August 2011, amid concern that exports fromRussia, the world’s biggest supplier, may be disrupted, and as astrike continues at mines in South Africa.