May 31 (Bloomberg) -- Gold futures slumped the most in two weeks as U.S. consumer confidence climbed in May to the highest in almost six years, stoking concern that the Federal Reserve may scale back monetary stimulus.
The Thomson Reuters/University of Michigan final index of sentiment rose to 84.5, the highest since July 2007, from 76.4 a month earlier. The greenback climbed as much as 0.7 percent against a basket of major currencies as euro-area unemployment increased to a record in April. Gold has dropped 17 percent this year.
“Today’s data gives the Fed another reason to start looking at lowering the stimulus package,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “The dollar is also weighing on gold.”
Gold futures for August delivery fell 1.3 percent to settle at $1,393 an ounce at 1:49 p.m. on the Comex in New York, the biggest drop for a most-active contract since May 17.
In May, futures fell 5.4 percent, the seventh drop in eight months, after slumping into a bear market in April as some investors lost faith in the metal as a store of value amid low inflation and a rally in the equity market.
The China Gold Association said demand may ebb in the second half of this year after surging in April. Assets in global exchange-traded products backed by the metal fell to 2,152 metric tons yesterday, the lowest since June 2011, according to data compiled by Bloomberg.
India is the world’s biggest gold buyer, followed by China.
Silver futures for July delivery declined 2 percent to $22.243 an ounce, the biggest drop since May 15. This month, the price tumbled 8 percent, the fourth straight drop.
This year, silver has slumped 26 percent, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index, followed by corn and gold.
On the New York Mercantile Exchange, palladium futures for September delivery fell 0.9 percent to $753.65 an ounce. This month, the price rose 8 percent, the most since November, on concern that global demand may outpace supplies for the metal used in jewelry and pollution-control devices in vehicles.
Platinum futures for July delivery dropped 1.4 percent to $1,461.80 an ounce. In May, the price fell 3 percent, the fourth straight decline and the longest slump since October 2008.
This year, palladium has climbed 7.2 percent, while platinum dropped 5.2 percent.
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