Gold Posts Longest Run of Quarterly Losses Since 1997 on Rates

  • ADP data shows U.S. payrolls in September beat forecasts
  • RJO's Haberkorn sees `a lot of money coming off the table'

Gold had a fifth quarterly drop, the longest losing streak since 1997, as robust U.S. hiring adds to signs of strength in the economy that’s seen moving the Federal Reserve closer to boosting interest rates.

Company payrolls rose 200,000 in September, figures from the ADP Research Institute showed, beating the 190,000 median forecast of economists surveyed by Bloomberg. When Fed officials left rates unchanged at their September meeting, they said that the liftoff will come when they see “some further improvement in the labor market.” Tighter monetary policy hurts gold’s appeal because it doesn’t pay interest or give returns like assets such as bonds and equities.

Bullion is set for a third annual loss, the longest stretch since 1998, after the metal lost its allure as a store of value. While traders are pricing in a 43 percent chance that the Fed will move in December and an even smaller chance of 16 percent in October, “no one wants to be caught long gold on a surprised Fed rate announcement,” said Bob Haberkorn, a senior market strategist at RJO Futures in Chicago.

“There’s a lot of money coming off the table,” Haberkorn said in a telephone interview. “There’s a lot of indecision on Fed speak.”

Gold futures for December delivery fell 1 percent to settle at $1,115.20 an ounce at 1:41 p.m. on the Comex in New York, after touching $1,110.80, the lowest since Sept. 16. Prices lost 4.8 percent this quarter, the most in a year.

Silver also declined on the Comex. Platinum and palladium retreated on the New York Mercantile Exchange.

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