Feb. 22 (Bloomberg) -- Gold futures slumped to a seven-month low as signs of economic optimism eroded demand for the precious metal as a haven. Silver also declined.
German business confidence increased to a 10-month high in February, a report showed today. Gold dropped for the third straight week on speculation the Federal Reserve will wind down U.S. monetary stimulus.
“The world is not falling apart, and gold is no longer indispensable,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The fact that the U.S. is talking about ending the stimulus program tells us that the economy is doing relatively better.”
Gold futures for April delivery fell 0.4 percent to close at $1,572.80 an ounce at 1:50 p.m. on the Comex in New York, the lowest settlement since July 18. The metal, down 2.3 percent this week, has dropped 11 percent in the past 12 months.
Silver futures for May delivery declined 0.8 percent to $28.52 an ounce, the lowest closing price since Aug. 17. This week, the price dropped 4.5 percent, the third straight decline. The metal has slumped 17 percent in the past 12 months.
On the New York Mercantile Exchange, platinum futures for April delivery declined 0.8 percent to $1,607.40 an ounce. This week, the metal dropped 4.2 percent, the most since mid-December.
Palladium futures for March delivery gained 0.2 percent to $735.30 an ounce. This week, the price dropped 2.4 percent.
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