Gold Falls as Recovering Economy Curbs Alternative-Asset Demand
Gold futures fell in New York on expectations that an improving economy will erode the appeal of the precious metal as an alternative investment.
U.S. companies added more jobs in January than forecast, figures from ADP Employer Services show. Gold dropped 6.1 percent last month, after rallying 30 percent in 2010, as investors cut holdings in exchange-traded funds and moved into stocks and other raw materials.
“No one expects gold to return 30 percent like last year,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “The economy is doing better, and it takes away the bid for gold. The funds feel there are better opportunities in other commodities like corn, soybeans and wheat.”
Gold futures for April delivery fell $8.20, or 0.6 percent, to settle at $1,332.10 an ounce at 2:15 p.m. the Comex in New York. The commodity rose to a record $1,432.50 on Dec. 7.
Bullion held through exchange-traded products fell for a seventh day yesterday, losing 2.47 metric tons to 2,028.74 tons, data compiled by Bloomberg from 10 providers show. That’s the lowest level since June 9. Holdings reached a record 2,114.6 tons in December.
Cotton rose to a record, and sugar reached a 30-year high today. Corn and soybean futures traded at the highest levels in more than two years.
Silver futures for March delivery dropped 22.5 cents, or 0.8 percent, to $28.289 an ounce on the Comex. The metal slipped 8.9 percent in January, the first monthly drop since July.
Palladium for March delivery lost $13, or 1.6 percent, to $810.55 an ounce on the New York Mercantile Exchange. Platinum futures for April delivery fell $4.40, or 0.2 percent, to $1,828.60 an ounce.