VINACHEM

Gold rebounded from the lowest levelin 34 months, trimming the worst quarterly slump since at least1920, as some investors deemed the decline excessive. Silverpared its biggest quarterly loss since 1980.

Spot bullion rose as much as 1 percent to $1,212.38 anounce and traded at $1,206.10 at 2:38 p.m. in Singapore aftersliding to $1,180.50, the lowest since August 2010. Pricesdropped 25 percent since the start of April on speculation theU.S. Federal Reserve will reduce stimulus. Silver rose 1.9percent to $18.838 an ounce, reducing its largest quarterly dropsince the Hunt brothers tried to corner the market. Platinumtumbled to the lowest since October 2009.

Gold is poised for the biggest annual loss in more thanthree decades after gaining for 12 years as the Fed cutborrowing costs to a record to bolster the economy. Investorsare selling bullion from exchange-traded products at a recordpace as unprecedented money printing by central banks around theworld failed to spur inflation. Analysts from Morgan Stanley toCredit Suisse Group AG and Goldman Sachs Group Inc. cutforecasts this month on prospects for reduced asset purchases.

“We’ve had quite a lot of positive data out of the U.S.and people are still focused on the tapering of stimulus, sogold’s been hit quite hard,” Alexandra Knight, an economist atNational Australia Bank, said by phone from Melbourne. “There’sdefinitely been a loss of confidence in gold and that’s seen inthe ETF liquidations. There’re still people who are interestedin gold but because prices have fallen so much and so rapidly,they’ll wait for some stabilization.”

Investor Sales

Gold’s 14-day relative strength index has been below thelevel of 30 since June 20. That indicates to some analysts whostudy charts that a rebound may be imminent.

Fed Chairman Ben S. Bernanke said this month that the U.S.central bank, which buys $85 billion of Treasury and mortgagedebt a month, may trim purchases this year and end the programin 2014 should the economy continue to improve. Data this weekshowed U.S. consumer spending, durable goods orders, consumer confidence and home sales rose in May, even as economic growthin the first quarter was less than previously estimated.

Gold has fallen 28 percent in 2013 as investors sold 583.2metric tons of gold from ETPs, erasing more than $62 billion inthe value of the funds. Bullion tumbled into a bear market inApril, setting off a buying frenzy of coins and jewelry aroundthe world. A lack of accelerating inflation and concern aboutthe strength of the global economy is also hurting silver,platinum and palladium, which are used more in industry.

Singer, Ross

Paul Singer’s Elliott Management Corp. and SchroderInvestment Management Ltd.’s Christopher Wyke are amonginvestors sticking with their bullish views. Wyke predicted thisweek that prices will reach a new high as investors seekinsurance against economic and political risk, while Elliottsaid in April that bullion remains the best store of value.

Retired Eurobond trader and former managing director atDeutsche Bank AG Stanley Ross said in a June 6 interview thathe’s very bearish about the world economy in part because of theprinting of money by world central banks, and predicts gold willbe at twice the price it is now within a year.

Assets in the SPDR Gold Trust, the largest bullion-backedETP, were unchanged for a second day yesterday after decliningto the least since February 2009 on June 25. Holdings haveshrunk 21 percent this quarter, the biggest such slide since thefund was introduced in 2004.

Soros, Paulson

Billionaire investor Gorge Soros joined funds run byNorthern Trust Corp. and BlackRock Inc. in cutting holdings inthe SPDR in the first quarter, U.S. government filings showed inMay. John Paulson, the biggest investor, kept his stake of 21.8million shares. The number of hedge funds investing in goldglobally shrank to 290 in May, the lowest since 2010, from 310in December, according to EurekaHedge Pte Ltd., a Singapore-based research company.

Silver for immediate delivery rose as much as 2.6 percentto $18.9725 an ounce, reversing a drop to $18.2305, the lowestsince August 2010. The metal is 34 percent lower this quarterand fell 38 percent in 2013, making it the worst performer onthe Standard & Poor GSCI Spot Index of commodities this year.

Silver plummeted 58 percent in the first three months of1980. The collapse came after William Herbert Hunt and brothers,Nelson Bunker and Lamar, bought more than 195 million ounces inthe 1970s. In 1988, a federal court found that the three hadattempted to illegally corner the market.

Lost Faith

One ounce of gold bought as little as 63.581 ounces ofsilver today, the least in a week. The so-called ratio climbedto 66.4701 this week, the highest since August 2010, asinvestors sold the metal alongside gold, losing faith in a storeof value with ties to economic growth.

Spot platinum fell as much as 2.1 percent to $1,294.60 anounce, the lowest since October 2009, before trading at$1,308.55. It cost as much as 1.1035 times the price of goldtoday, the most since August 2011. The metal used mainly inautocatalysts has fallen 17 percent this quarter, the worstshowing since the three months to September 2008 when LehmanBrothers Holdings Inc. collapsed.

Palladium climbed 0.3 percent to $647.55 an ounce, trimminga 16 percent this quarter.