July 2 (Bloomberg) -- Gold declined for the first time in three sessions as improving U.S. economic data strengthened the case for the Federal Reserve to slow the pace of stimulus and as a rising dollar cut the appeal of alternative investments.
Orders placed with U.S. factories rose in May, the Commerce Department said today. Bullion futures slid 23 percent in the second quarter, the most since at least 1975, as Federal Reserve Chairman Ben S. Bernanke said that the central bank may slow its bond-buying program this year. The dollar gained as much as 0.5 percent against a basket of six currencies, extending the year’s advance to 4.6 percent.
“The market is nervous about what the Fed wants to do and wants more clarity,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Also, the stronger dollar continues to hurt gold.”
Gold futures for August delivery slid 1 percent to settle at $1,243.40 an ounce at 1:42 p.m. on the Comex in New York, after climbing as much as 0.9 percent. The metal gained 3.6 percent in the previous two sessions.
The metal has slipped 26 percent this year, wiping $59.8 billion from the value of gold-backed exchange-traded product holdings, as some investors lost faith in it as a store of value. ETP assets fell 1.5 metric tons to 2,043.9 tons yesterday, data compiled by Bloomberg show.
Silver futures for September delivery fell 1.4 percent to $19.309 an ounce on the Comex.
Trading was 48 percent lower than the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
On the New York Mercantile Exchange, platinum futures for October delivery declined 1.1 percent to $1,367.80 an ounce. Last month, the metal dropped 8.3 percent, the fifth straight loss and the longest slump since October 2001.
Palladium futures for September delivery rose 0.3 percent to $688.90 an ounce, the fourth straight advance and the longest stretch of gains in more than a month.
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