Gold posted a consecutive weekly drop for the first time this year as the U.S. economy expanded faster than estimated in the fourth quarter, damping demand for a haven.
Gross domestic product grew at a 1 percent annualized rate, topping an initial estimate of 0.7 percent, Commerce Department figures showed Friday. The median forecast in a Bloomberg survey called for a 0.4 percent gain. Improving economic conditions spurred speculation that the Federal Reserve could have reason to raise interest rates again, cutting the appeal of bullion as a store of value. The dollar headed for a weekly rally.
“We had a bit of a stronger than expected print on GDP, and it looks pretty decent in the headlines,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “Gold adjusted modestly lower, and it probably also responded to the U.S. dollar.”
Gold futures for April delivery slid 1.5 percent to settle at $1,220.40 an ounce on the Comex in New York. Prices dropped 0.8 percent this week, following a 0.7 drop last week.
The metal is still up 9.3 percent in February, heading for the biggest monthly gain since 2012. Gold is among the top performing commodities in 2016 as volatility in equity and currency markets stoked demand for haven assets. Holdings in exchange-traded products backed by bullion are at the highest in a year, data compiled by Bloomberg show. The assets increased for the past 11 days.
In other metals:
- Silver futures for May delivery lost 3.2 percent to $14.714 an ounce on the Comex.
- On the New York Mercantile Exchange, platinum and palladium also declined.