- ‘The Fed fears are already marked into the market,’ Gero says
- Silver futures cap biggest monthly drop since September 2014
Gold advanced for the first time in 10 days to snap its longest selloff in more than a year as U.S. consumer confidence unexpectedly fell and manufacturing gauges weakened, boosting demand for the metal as a store of value.
A private report Tuesday showed consumer confidence slid in May to the lowest level in six months as Americans grew concerned that jobs are more difficult to find. Separate reports showed weak manufacturing in Chicago and Dallas.
Gold has lost about 5.9 percent in May, paring this year’s rally, as traders brace for tighter U.S. monetary policy amid signs of an improving economy. Higher rates curb gold’s appeal against interest-bearing assets. Tuesday’s economic data helped ease those concerns. The Bloomberg Dollar Spot Index dropped as much as 0.3 percent, and odds that the Fed will raise rates in June fell to 24 percent, from 30 percent on Friday.
“With gold up, it suggests the Fed fears are already marked into the market,” George Gero, a managing director at RBC Wealth Management in New York, said in a telephone interview. “Anytime the dollar is down it’s good for gold.”
Bullion for immediate delivery gained 1.1 percent to $1,217.80 an ounce at 2:12 p.m. in New York, according to Bloomberg generic pricing. The metal headed for its biggest monthly decline since November.
- Gold futures for August delivery gained 0.1 percent to settle at $1,217.50 an ounce on the Comex in New York.
- Silver futures on the Comex fell 10 percent in May, the biggest monthly decline since September 2014.
- On the New York Mercantile Exchange, platinum dropped while palladium gained.