Gold Prices Decline for Third Session on Signs of Improving U.S. Economy
Gold prices fell for the third straight session as signs the U.S. economy is improving drove U.S. equities higher, eroding demand for the metal as an alternative investment.
U.S. consumers increased spending more than forecast in February as incomes climbed, government figures showed today, and an index of pending home resales unexpectedly increased. The economy grew at a 3.1 percent annual rate in the fourth quarter, revised up from 2.8 percent estimated last month, data showed last week. On March 24, gold futures rose to a record of $1,448.60 an ounce on turmoil in Japan and the Middle East.
“The U.S. numbers have not been all that awful,” said Afshin Nabavi, a senior vice president at MKS Finance SA, a bullion refiner in Geneva. “The market has had a huge move up, and the higher we go up, the more chance of a bigger correction.”
Gold futures for June delivery fell $6.30, or 0.4 percent, to settle at $1,421.30 at 1:30 p.m. on the Comex in New York.
This quarter, prices are little changed after gaining in the previous nine quarters.
The Dow Jones Industrial Average rose for the fourth straight session, and Treasury two-year yields gained.
“The strong U.S. economic data provided some investors with a good excuse to take profit after gold hit a record,” said Hwang Il Doo, a senior trader at Korea Exchange Bank (004940) Futures Co. in Seoul. “Bullion can soon resume the rally since there are many uncertainties lingering: the euro zone debt problems and the Middle East unrest, as well as the fallout from the Japanese earthquake.”
Silver futures for May delivery rose 3.9 cents, or 0.1 percent, to $37.088 an ounce. The price headed for the ninth straight quarterly gain.
Palladium futures for June delivery dropped $4.70, or 0.6 percent, to $745.70 an ounce.
Platinum futures for July delivery rose $2.40, or 0.1 percent, to $1,752.10 an ounce.
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