Feb. 15 (Bloomberg) -- Gold futures slumped below $1,600 an ounce for the first time since August as signals on the U.S. economy spurred optimism, eroding demand for the precious metal as a store of value.
In February, manufacturing in the New York region unexpectedly expanded, and consumer confidence rose to a three-month high, separate reports showed today. Billionaire investors George Soros and Louis Moore Bacon cut their stakes in exchange-traded products backed by gold in the fourth quarter, government filings showed. The Standard & Poor’s 500 index of equities has gained 6.3 percent this year, while gold has dropped 4 percent.
“The economy is doing better and equities are winning, so people don’t want gold,” Michael Gayed, the chief investment strategist at New York-based Pension Partners LLC, which advises on more than $150 million in assets, said in a telephone interview. “No one wants to invest in safe-haven assets.”
Gold futures for April delivery slumped 1.6 percent to settle at $1,609.50 at 1:37 p.m. on the Comex in New York. Earlier, the price touched $1,596.70, the lowest for a most-active contract since Aug. 15. This week, the metal dropped 3.4 percent, the most since June.
Federal Reserve Chairman Ben S. Bernanke said today that stronger U.S. growth benefits the world economy .
“With unemployment at almost 8 percent, we are still far from the fully healthy and vibrant conditions that we would like to see,” Bernanke said at a meeting in Moscow of the Group of 20. The U.S. “is using domestic policy tools to advance domestic objectives,” he said.
On Jan. 3, minutes from the Fed showed $85 billion in monthly bond purchases, the third round of so-called quantitative easing, probably will end sometime in 2013.
“People think the conditions are improving, and the stimulus may disappear,” Chuck Butler, the president of EverBank World Markets in St. Louis, said in a telephone interview.
Twenty analysts surveyed by Bloomberg this week expect gold to fall next week, while 11 were bullish and three were neutral, making the proportion of bears the highest since Dec. 30, 2011.
Paulson & Co., the largest investor in the SPDR Gold Trust, the biggest fund backed by the metal, kept its stake at 21.8 million shares in the quarter, according to a filing yesterday.
Silver futures for March delivery dropped 1.7 percent to $29.849 an ounce on the Comex. This week, the price tumbled 5.1 percent, the most since Dec. 21.
On the New York Mercantile Exchange, platinum futures for April delivery slumped 1.9 percent to $1,677.70 an ounce, the biggest loss since Dec. 20. The price fell 2.2 percent this week.
Palladium futures for March delivery fell 1.4 percent to $753.15 an ounce on the Nymex.
This year, platinum has climbed 8.8 percent, and palladium has gained 7.1 percent. Silver has dropped 1.3 percent.
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