Gold Declines From Two-Week High as Dollar Advances
New York (Oct 10) Gold futures fell from a two-week high as signs of an improving U.S. economy boosted the dollar, cutting the metal’s appeal as an alternative investment.
The Bloomberg Dollar Spot Index rose for a second day after government data yesterday showed the number of people seeking jobless benefits averaged the lowest in eight years. A separate report this week showed job openings in August at the highest in 13 years. Bullion still posted a weekly advance amid growth concerns in China and Europe.
Gold fell 8.4 percent last quarter as signs of a quickening U.S. recovery helped push the dollar to its biggest gain in six years. The metal rallied the most in two months yesterday after Federal Reserve policy makers said a global economic slowdown poses potential risks to the U.S., sparking speculation that the central bank will keep interest rates lower for a longer period.
“The dollar is much stronger today, and gold is consolidating its gains,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview.
Gold futures for December delivery fell 0.3 percent to settle at $1,221.70 an ounce at 1:51 p.m. on the Comex in New York. Prices reached $1,234 yesterday, the highest since Sept. 23, on the way to the first weekly gain since August.
The commodity slid to $1,183.30 on Oct. 6, the lowest since Dec. 31. Money managers have cut their net-long position, or bets on higher prices, to the lowest this year, U.S. government data show. Holdings in gold-backed exchange-traded products are at a five-year low, according to data compiled by Bloomberg.
Silver futures for December delivery lost 0.7 percent to $17.303 an ounce on the Comex. The metal capped its first weekly gain in six weeks.
On the New York Mercantile Exchange, platinum futures for delivery in January declined 1.3 percent to $1,261.60 an ounce, snapping four straight gains. Palladium futures for December delivery fell 1.9 percent to $785.05 an ounce, the first decline this week.