Gold retreated the most in more than two weeks as better-than-expected U.S. economic data reinforced the case for the Federal Reserve to slow stimulus measures.
U.S. gross domestic product expanded 2.5 percent in the second quarter, up from an earlier estimate of 1.7 percent, a Commerce Department report showed. Initial jobless claims dropped to 331,000 in the past week from 337,000 a week earlier, the Labor Department said. Gold rose to a three-month high yesterday on concern that the U.S. and its allies will launch a military strike in retaliation for Syria’s alleged use of chemical weapons.
“The GDP numbers are very big, and put the story of tapering in September back in the forefront,” Chris Gaffney, the senior market Strategist at EverBank Wealth Management, said in a telephone interview from St. Louis. “The drumming of the Syria war has receded today, taking some premium away.”
Gold futures for December delivery fell 0.4 percent to settle at $1,412.90 an ounce at 1:55 p.m. on the Comex in New York, the biggest drop since Aug. 13. The precious metal has tumbled 16 percent this year on speculation that the Fed will slow the pace of the stimulus.
The minutes of the Federal Open Market Committee policy meeting in July, released Aug. 21, said central bankers were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to start reducing bond buying later this year if the economy improves. The officials are scheduled to meet in September.
Gold is heading for a second monthly gain as prices, which touched a 34-month low of $1,179.40 on June 28, climbed on increased sales of jewelry and bars.
Silver futures for December delivery slumped 1.2 percent to $24.14 an ounce in New York.
Platinum futures for October delivery slipped 1.1 percent to $1,522.40 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery declined 1.1 percent to $740.10 an ounce.