Gold Sags for Second Day as U.S. Data Signal a Stronger Economy

  • Exchange-traded gold holdings climb by 2.1 tons, most in week
  • Funds boost net-long position by 2.1% in week to March 29

Will Federal Reserve, Oil Dampen Gold Market Gains?

Gold sank for a second day as U.S. jobs and manufacturing data added to speculation that growth in the world’s largest economy is gaining momentum, damping demand for the metal as an alternative asset.

The metal has fallen 1.4 percent from a peak Friday, when U.S. jobs data showed resilient hiring and a pickup in wages in March. A separate report showed a surge in orders that signal American factories are emerging from their worst slump since the last recession.

Gold futures rose 17 percent in the first three months of the year, the biggest quarterly surge since 1986, as the Federal Reserve scaled back plans for interest-rate increase after a hike in December. Fed Chair Janet Yellen said last week it’s appropriate for central bankers to “proceed cautiously” because the world economy presents heightened risks.

“It still seems like a June rate hike is on the table because of the economic indicators we’ve seen the last week, the jobs report and others,” George Gero, managing director at RBC Wealth Management in New York, said in a telephone interview. “All of that is bringing some uncertainty, and uncertainty is something that the traders pull back on gold.”

Gold futures for June delivery slid 0.3 percent to settle at $1,219.30 an ounce at 1:45 p.m. on the Comex in New York.

Hedge funds boosted net-long holdings in gold futures and options by 2.1 percent to 164,946 contracts in the week ended March 29, according to U.S. Commodity Futures Trading Commission data released three days later. Money managers have increased bullish wagers in three of the past four weeks.

In ETFs and other metals:

  • Holdings in exchange-traded funds backed by gold increased by 2.1 metric tons on Friday to 1,764.4 tons, according to data compiled by Bloomberg.
  • Silver futures for May delivery dropped 0.7 percent to $14.944 an ounce on the Comex.
  • On the New York Mercantile Exchange, platinum and palladium also fell.
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