Gold futures slid for the fourth time in five sessions as a surge in US stocks reduced the precious metal’s haven demand.
The Standard & Poor’s 500 Index advanced on hopes that the crisis at Espirito Santo SA of Portugal will be managed. US statistics showed Aug.1 that payrolls added more than 200,000 jobs for the sixth month in a row. Last week, gold declined 0.8%, for the third consecutive time.
“The strength in the equity market is putting pressure on gold. It’s clear that the U.S. economy is showing strength, even though the pace is slow,” trader Frank Lesh of Chicago-based FuturePath Trading LLC told Bloomberg in an interview.
The per ounce prices of gold futures for December delivery dropped 0.4% to $1,291.40 per ounce as of 10:32 am on the Comex in New York. On Aug 1, the price reached $1,281, a low not posted by a most active contract since June 19.
The volume of futures changing hands on the exchange at the time was 52% lower than the average for the past 100 days.
Gold lost 3% in July on fears that the Federal Reserve would hike interest rates as the economy picked up.
Commerzbank AG analysts said the central bank was still holding back from normalizing interest rate levels in the predictable future. Nevertheless, positive economic data in the course of the next couple of months are likely to bring the subject of interest-rate increases back into the Fed’s focus, which would hurt the comparative appeal of gold, the analysts added, as reported by the Wall Street Journal.
The metal surged 10% in the first half of 2014 as hostilities in the Middle East and Ukraine bolstered its haven demand.
September-delivery silver futures slid 0.1% to $20.35 per ounce on the Comex. Platinum futures for October settlement sank 0.1% to $1,462.20 per ounce on the New York Mercantile Exchange.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com