Gold Falls for First Time in a Week on U.S. Retail Sales
Gold fell for the first time in a week as signs of gains in the U.S. economy boosted speculation that the Federal Reserve will scale back monetary stimulus, while the dollar’s rally eroded the appeal of the metal.
U.S. retail sales in July rose for the fourth straight month, consecutive month, government data showed today, and the greenback climbed to a one-week high against a basket of 10 currencies. Fed Reserve Bank of Atlanta President Dennis Lockhart indicated that policy makers may start to slow bond purchases as soon as next month.
“The U.S. economy is showing signs of improvement,” Michael Haigh, the head of commodity research at Societe Generale SA in New York, said in a telephone interview. “We could see a further drop in gold prices.”
Gold futures for December delivery fell 1 percent to settle at $1,320.50 an ounce at 1:47 p.m. on the Comex in New York. The price climbed 4 percent in the previous four sessions. Yesterday, the metal reached $1,343.70, the highest for a most-active contract since July 24.
The commodity has slumped 21 percent this year, erasing $58.9 billion from the value of exchange-traded products backed by the metal. Some investors lost faith in gold as a store of value amid a U.S. equity rally and low inflation.
The metal jumped 70 percent from the end of December 2008 to June 2011 as the Fed bought more than $2 trillion in bonds to bolster the economy.
Silver futures for September delivery rose less than 0.1 percent to $21.343 an ounce on the Comex. Earlier, the price reached $21.75, the highest since June 19. The metal has slumped 29 percent this year.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.1 percent to $1,499.70 an ounce. Palladium futures for September delivery climbed 0.2 percent to $738.90 an ounce.
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