Gold Set to Drop a 3rd Day as Growth Damps Stimulus Bets
Gold declined for a third day as investors weighed whether the Federal Reserve will signal a new round of measures to boost the economy tomorrow and as Spain said it will delay a decision on seeking aid.
Fed Chairman Ben S. Bernanke will speak tomorrow at an annual meeting in Jackson Hole, Wyoming, where in 2010 he foreshadowed $600 billion of bond buying. U.S. consumer spending rose in July for the first time in three months, while more Americans than forecast applied for unemployment benefits last week, separate government reports showed today. Spain’s Prime Minister Mariano Rajoy said the country will delay seeking a sovereign bailout until the aid conditions are clear.
“The U.S. data has been mixed, so people are unsure about tomorrow,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Also, the worries about Europe are back in the forefront, and investors are moving out of commodities.”
Gold futures for December delivery fell 0.4 percent to settle at $1,657.10 an ounce at 1:52 p.m. on the Comex in New York. Prices dropped 0.8 percent in the previous two sessions on bets that Bernanke will refrain from announcing fresh stimulus measures, reducing the appeal of the metal as a hedge against inflation.
Bullion surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing.
The Standard & Poor’s GSCI Spot Index of 24 commodities slid as much as 0.6 percent.
Silver futures for December delivery declined 1.5 percent to $30.446 an ounce in New York, the biggest fall for a most- active contract since Aug. 2.
On the New York Mercantile Exchange, platinum futures for October delivery retreated 1.1 percent to $1,503.70 an ounce, the fifth straight decline and the longest losing streak since June 22. Palladium futures for December delivery slumped 3.2 percent to $616.40 an ounce, the biggest fall since May 23.
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