Gold futures fell, capping the fourth straight weekly decline, as President Barack Obama said federal spending cuts will cause “ripple effects” through the U.S. economy, and jobs will be lost.
Obama called on Congress to halt the “slow grind” on the economy caused by automatic spending cuts that start today and to pass an alternative that closes tax loopholes and cuts spending, including entitlements. In February, gold dropped for the fifth straight month, the longest slump in 16 years.
“The market is sensing deflationary worries as government spending will drop, and that is working against gold,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.
Gold futures for April delivery fell 0.4 percent to close at $1,572.30 an ounce at 1:38 p.m. on the Comex in New York, the lowest settlement since July 18. The metal, down less than 0.1 percent this week, has dropped 6.2 percent in 2013.
Earlier today, the price gained as much as 0.6 percent as sagging manufacturing in China and slumping U.S. consumer incomes boosted demand for gold as a haven.
Silver futures for May delivery rose 0.2 percent to $28.49 an ounce. Earlier, the price touched $27.925, the lowest for a most-active contract since Aug. 16. The metal has dropped 5.7 percent this year.
On the New York Mercantile Exchange, platinum futures for April delivery fell 0.6 percent to $1,573.50 an ounce. The price dropped for the fourth straight day, the longest slump in nine weeks. The metal has advanced 2 percent this year.
Palladium futures for June delivery dropped 1.9 percent to $720.40 an ounce. The metal, down 2 percent this week, has gained 2.4 percent this year.