Gold prices plunged, approaching the biggest weekly loss since eight months ago, after gains in US stocks and possibility of easing mayhem in Ukraine hampered the metal’s role as a safe haven.
US orders for durable goods surprisingly jumped in April, suggesting rising factory activity, according to government data on May 27. On Friday, the Standard & Poor’s 500 Index soared to a record before reversing gains. In 2013, prices of gold dropped on speculation that the Federal Reserve would progressively reduce the pace of bond buying as the economy recovered.
A US defense official said Russia had ordered most of its soldiers back from its border with Ukraine. Gold plummeted to below $1,250 per ounce to a low last registered 16 weeks ago and stayed on course for its decline for the fifth day in a row, the longest such losing streak since April 1.
“The safe-haven premium is waning as people are gradually shrugging off worries about a slowdown in the U.S. Money continues to flow into equities,” Frank McGhee of Chicago-based Integrated Brokerage Services LLC told Bloomberg.
The per-ounce price of gold futures for delivery in August dropped 0.8% to $1,246.50 as of 10:58 on the Comex in New York. The price hit $1,244.50 earlier, the lowest for a most-active future since the 3rd of February. The precious metal has plunged 3.5% the biggest drop since September 13.
“Risk appetite has been improving,” said analyst Sarah Xie of Wing Fung Financial Group Ltd in Hong Kong. Investors are moving their capital from gold to equities as tension in Ukraine eases, Xie added.
Tyler Richey of 7:00’s Report said that a combination of factors this week pushed gold prices lower, including the elections in Ukraine that took place without hiccups and the rise to record highs of the S&P 500, MarketWatch reported.
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