March 28 (Bloomberg) -- Gold declined as signs that the U.S. economy is improving curbed its appeal as an alternative investment and as some investors deemed last week’s rally to a record to be overdone. Silver, platinum and palladium also fell.
Immediate-delivery bullion lost as much as 0.9 percent to $1,417.22 an ounce, and traded at $1,417.86 at 3:18 p.m. in Singapore. The price, which reached a record $1,447.82 on March 24, is little changed this quarter. The April-delivery contract dropped 0.6 percent at $1,419.2 on the Comex in New York.
“The strong U.S. economic data provided some investors with a good excuse to take profits after gold hit a record,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “Bullion can soon resume the rally since there are many uncertainties lingering around the market: the euro-zone debt problems and the Middle East unrest as well as the fallout from the Japanese earthquake.”
The U.S. economy grew at a 3.1 percent annual rate in the fourth quarter, led by a jump in consumer spending. The revised increase in gross domestic product compares with a 2.8 percent estimate issued last month, figures from the Commerce Department showed on March 25. The jobless rate unexpectedly fell to 8.9 percent in February and employers added 192,000 jobs.
Consumer spending in February, due to be released today, probably rose 0.5 percent after a 0.2 percent gain in January, according the median estimate of 63 economists surveyed by Bloomberg News. Household purchases account for about 70 percent of the U.S. economy.
U.S. Federal Reserve policy makers should review whether to complete a second round of quantitative-easing bond purchases due to end in June because of strong economic data, Federal Reserve Bank of St. Louis President James Bullard said March 26.
The Dollar Index, which gauges the greenback’s value against six major currencies, rose as much as 0.3 percent today after gaining 0.7 percent last week. Precious metals normally move counter to the U.S. currency. Gold has jumped 28 percent in the past year, while the Dollar Index has dropped 6.2 percent.
In Japan, hazardous radiation levels found at two quake-damaged reactors delayed work at the Fukushima Dai-Ichi power plant. In Libya, the North Atlantic Treaty Organization took command of military operations related to enforcement of a United Nations mandate to ensure the safety of civilians in Libya and launched strikes against targets in Tripoli and Sirte.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended March 22 by 0.2 percent, the first gain in three weeks, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets that prices will rise, outnumbered short positions by 174,837 contracts on the Comex division of the New York Mercantile Exchange, the Washington based commission said in its Commitments of Traders report.
Silver for immediate delivery dropped 1.6 percent to $36.725 an ounce. The metal jumped 5.9 percent last week and is headed for a ninth straight quarterly advance. Silver has more than doubled in the past year.
Immediate-delivery platinum lost 1.2 percent to $1,731.65 an ounce, while cash palladium dropped 1.1 percent to $742.25 an ounce.
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