Gold futures fell to a two-week low in New York as signs of an improving U.S. economy reduced the appeal of haven assets.
Orders for capital equipment such as computers and machinery probably climbed in March by the most in four months in the U.S., an April 24 report may show. Gold has dropped 7.5 percent from a six-month high on March 17, partly as investors assessed prospects for further cuts in monetary stimulus by the Federal Reserve amid signs of gains in the labor market.
“There is not much interest in gold as the U.S. economic conditions improve,” George Gero, a vice president and precious-metal strategist in New York at RBC Capital Markets, said in a telephone interview. “The physical buyers are also waiting on the sidelines to see if there will be further reduction in prices.”
Gold futures for June delivery fell 0.4 percent to settle at $1,288.50 an ounce at 1:35 p.m. on the Comex in New York. Earlier, the price touched $1,281.80, the lowest for a most-active contract since April 2. Last week, the metal declined 1.9 percent to $1,293.90, closing below the 200-day moving average.
The Fed in March reduced the monthly pace of bond purchases by $10 billion to $55 billion, and signaled additional cuts in “further measured steps.” Gold jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut interest rates to a record in a bid to boost the economy.
Hedge funds reduced bullish bets on the metal for the fourth week, the longest slump this year.
In the week ended April 15, the net-long position contracted 8.5 percent to 90,137 futures and options, the lowest since mid-February, government data showed on April 18. Bets on lower prices more than doubled in the past month.
Silver futures for May delivery declined 1.3 percent to $19.351 an ounce on the Comex.