Gold Drops to 2-Week Low as Services Expansion Spurs Taper Bets
Gold slumped to the lowest price in more than two weeks as U.S. service industries grew faster than forecast, increasing speculation that the Federal Reserve may start tapering stimulus measures later this year.
The Institute for Supply Management’s non-manufacturing index rose to 55.4 in October, a report from the Tempe, Arizona-based group showed today. The median estimate in a Bloomberg survey of economists was 54. Readings above 50 signal expansion. The Bloomberg Dollar Index jumped as much as 0.3 percent against a basket of currencies after the data was released. The economy shows signs of “underlying strength,” Fed policy makers said on Oct. 30.
“The better-than-expected ISM number increases speculation whether tapering will begin in December or not,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The strength in the greenback continues to work against gold.”
Gold futures for December delivery slid 0.5 percent to settle at $1,308.10 an ounce at 1:43 p.m. on the Comex in New York, after touching $1,305.20, the lowest for a most-active contract since Oct. 17. Trading was 32 percent below the average in the past 100 days for this time of day, data compiled by Bloomberg show.
Silver futures for December delivery slipped 0.3 percent to $21.636 an ounce in New York, after touching $21.56, the lowest since Oct. 17.
On the New York Mercantile Exchange, platinum futures for January delivery fell 0.4 percent to $1,450 an ounce.
A strike that began Nov. 3 at Northam Platinum Ltd. (NHM) in South Africa over wages continued, and the National Union of Mineworkers will hold a meeting with workers on Nov. 7, the union said in a statement. Anglo American Platinum Ltd. (AMS), the biggest producer, will start talks with the Association of Mineworkers and Construction Union on Nov. 13, a company spokesman said.
Palladium futures for December delivery added 0.1 percent to $750.30 an ounce on the Nymex.
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