Gold futures declined as U.S. and European equities advanced, curbing demand for the precious metal as an alternative asset.
Stocks climbed on optimism over corporate earnings. U.S. consumer confidence soared in July to the highest in almost seven years on the heels of a strengthening labor market, a private gauge showed today. Earlier, gold reached a one-week high on demand for a haven amid escalating conflicts in the Gaza Strip and Ukraine.
The metal headed for a monthly decline, partly on the outlook for an increase U.S. interest rates. The dollar rose to a seven-week high against a basket of 10 major currencies before Federal Reserve officials start a two-day meeting today. Policy makers have tapered monetary stimulus on signs of recovery in the economy.
“It’s hard to establish a long-term position,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Maybe there’s not much need to be long gold here, if the equities aren’t showing a good amount of concern” with tensions in the Middle East and Eastern Europe, he said.
Gold futures for December delivery fell 0.4 percent to settle at $1,300.50 an ounce at 1:45 p.m. on the Comex in New York. Earlier, the price rose as much as 0.7 percent to $1,314.60, the highest for a most-active contract since July 22.
Trading more than doubled compared with the average for the past 100 days for this time, data compiled by Bloomberg show.
Gold climbed 8.2 percent this year amid mounting turmoil in the Mideast and Ukraine.
Today, Israeli aircraft, warships and artillery intensified their attacks on the Gaza Strip, the military said, after Prime Minister Benjamin Netanyahu told his country to brace for an extended campaign. The European Union curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions yet over President Vladimir Putin’s backing of the rebellion in eastern Ukraine.
In 2013, gold plunged 28 percent, the most in three decades, as U.S. equities surged amid signs of a rebound in the economy.
Silver futures for September delivery rose 0.1 percent to $20.583 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery fell 0.4 percent to $1,484.50 an ounce.
Palladium futures for September delivery declined 0.3 percent to $878.30 an ounce.