Gold Drops as U.S. Jobless Claims Slow, Investors Reduce Holding of ETFs
Gold declined in New York for the third time in four days on signs of a strengthening U.S. job market and a drop in holdings by exchange-traded fund investors.
Applications for unemployment benefits unexpectedly dropped last week to the lowest since April 2008, the government reported today, boosting the dollar and reducing demand for gold as an alternative asset. Holdings in bullion-backed ETFs fell for a fifth day to the lowest level since Nov. 16, as investors sold the metal to cover losses in other markets, data compiled by Bloomberg show.
“The jobless numbers were better than expected, and we’re seeing the dollar strengthen again,” Dennis Cajigas, a senior market strategist at Zaner Group in Chicago, said in a telephone interview. “The U.S. economy is starting to find some traction. The ETF numbers are also a factor.”
Gold futures for February delivery fell 0.2 percent to settle at $1,610.60 an ounce at 1:49 p.m. on the Comex in New York. The metal has climbed 13 percent this year. Prices dropped 6.9 percent last week after the Federal Reserve refrained from taking new action to boost economic growth.
Bullion-backed ETF holdings, which reached an all-time high of 2,360.81 metric tons on Dec. 14, fell to 2,329.921 tons yesterday.
Silver futures for March retreated 0.7 percent $29.047 an ounce on the Comex, extending this year’s decline to 6.1 percent.
On the New York Mercantile Exchange, palladium futures for March delivery jumped 3.2 percent, the most since Dec. 6, to $654.40 an ounce. Platinum futures for January delivery fell 0.5 percent to $1,431.20 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Joe Richter in New York at jrichter1@bloomberg.net
To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net; Claudia Carpenter at ccarpenter2@bloomberg.net
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