Gold Futures Drop to One-Week Low as U.S. Jobless Claims DeclineDebarati Roy
Gold futures fell to a one-week low after the average number of Americans filing for unemployment benefits in the past four weeks dropped to a 15-year low, reviving concern that interest rates will increase.
The average dropped to 266,250 in the period ended May 16 from 271,750, government figures showed Thursday. On Wednesday, holdings in exchange-traded products backed by gold dropped to the lowest since January, according to data compiled by Bloomberg.
Gold advanced on Wednesday after minutes from the Federal Reserve’s last meeting showed that officials in April didn’t expect to raise their benchmark rate at the next gathering in June. Higher borrowing costs drive investors to favor assets that pay interest, including new bonds, curbing the appeal of the metal, which generally offers returns only through price gains.
“Today’s number shows that the job market is on the right track, and a healthy economy is not good news for gold,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “The market expects the Fed to take some action in September, and the euphoria about the rate hike being ruled out in June is fast disappearing”
Gold futures for June delivery fell 0.4 percent to settle at $1,204.10 an ounce at 2:13 p.m. on the Comex in New York. The price touched $1,200.80, the lowest for a most-active contract since May 13.
Silver futures for July delivery rose 0.1 percent to $17.132 an ounce.
On the New York Mercantile Exchange, platinum futures for July delivery declined 0.4 percent to $1,152.30 an ounce.
Palladium futures for June delivery fell 0.1 percent to $776.10 an ounce. Volume on all contracts was 93 percent above the 100-day average, according to Bloomberg data.
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