Gold futures dropped to a two-week low as Germany’s business confidence rose more than forecast, bolstering the outlook for Europe’s largest economy and eroding the appeal of the precious metal as a haven.
The Ifo institute’s business climate index in January climbed to 104.2, the highest since June. In the U.S., claims for jobless benefits last week fell to a five-year low, the Labor Department said yesterday. Gold has declined 1.1 percent this month, while the MSCI All-Country World Index of equities has climbed 4.5 percent.
“The economic conditions are looking up, so people are rethinking about their investments in gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Equities seem more remunerative than gold at the moment.”
Gold futures for February delivery fell 0.8 percent to settle at $1,656.60 an ounce at 1:54 p.m. on the Comex in New York, the third straight decline. Earlier, the price touched $1,655, the lowest since Jan. 11. This week, the metal dropped 1.8 percent.
Silver futures for March delivery fell 1.6 percent to $31.206 an ounce on the Comex. This week, the price dropped 2.3 percent.
On the New York Mercantile Exchange, platinum futures for April delivery rose 0.7 percent to $1,694.90 an ounce. This week, the price climbed 1.2 percent, the fourth straight gain and the longest rally in almost a year.
Palladium futures for March delivery rose 2 percent to $741 an ounce on the Nymex. This week, the price gained 2.5 percent the third straight advance. Earlier, the metal reached $741.90, the highest since Sept. 9, 2011 after Johnson Matthey Plc said reserves in Russia, the world’s largest producer, are “pretty much exhausted,” and sales this year may be only 3 metric tons.