Gold hits one-month low as strong data offset safe-haven lure
Los Angeles (July 24) Gold hit a one-month low on Thursday after robust economic data from the United States, China and the euro zone deterred investors from safe-haven assets, even as tensions simmered in the Middle East and Ukraine.
Prices for the yellow metal fell 1 percent to below $1,300 an ounce as the dollar and stock markets rose on surprisingly low weekly jobless claims and robust corporate earnings out of the United States.
Data from Europe showed the services sector in the 18-member euro zone performing better than any forecast from 39 economists in a Reuters poll.
All that diverted investor attention from the clashes in Gaza between Hamas and Israel, as well as the tensions in the Crimean region after the sanctions on Russia and the downing of a Malaysian passenger jet, that sent bullion rallying last week.
"To be fair, I think some people have a right to be disappointed that the stresses around the world haven't led to a continued rise in the price of gold," said Adam Hewison, president at Marketclub.com in Annapolis, Maryland.
"We're probably in oversold territory right now where gold is concerned, but we also seem to be pulling into an area between $1,290 and $1,280 that should offer some support to the market."
By 4:15 p.m. EDT (2015 GMT), the spot price of bullion was down about $12 at around $1,303 an ounce, after touching a June 19 low of $1,287.46.
Benchmark U.S. gold futures for delivery in August, settled down $13.90 at $1,290.80. Traders said they placed stop-loss orders at below $1,300 to limit losses.
The dollar reached a near one-week high against the yen and was up 0.1 percent against a basket of main currencies after data showed the number of Americans filing new claims for unemployment benefits in the latest week fell to the lowest level since 2006.
Strong employment reports out of the United States over the past month have stoked speculation of an early interest rate increase. Higher rates could encourage investors to switch to assets that, unlike gold, pay interest.
Other data showed contracts to buy previously-owned U.S. homes hitting an eight-month high, the latest indication that housing is pulling out of a recent soft patch.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose for a second straight day on Wednesday, up 0.6 tonnes to 805.44 tonnes.
China's net gold imports from main conduit Hong Kong fell to a 17-month low in June as a weaker yuan and adequate stocks curbed fresh purchases. China is the world's largest gold buyer.
Platinum was down 0.8 percent at $1,465.30 an ounce, while palladium was steady at $868.25 an ounce. Silver lost 2.5 percent to $20.34 an ounce.
Source: Reuters
