Gold price declines for a third day on US, Chinese data
Singapore (Oct 19) Gold dropped for a third day as signs of a buoyant U.S. economy and faster-than-expected growth in China supported the case for the Federal Reserve to raise interest rates.
A private report on Friday showed U.S. consumer sentiment rose more than forecast this month, a day after government data showed jobless claims unexpectedly slid to match the fewest in four decades. China’s economy expanded 6.9 percent in the third quarter, beating economists’ estimates for 6.8 percent, data showed Monday.
Bullion prices reached a three-month high on Thursday after patchy data around the world prompted traders to bet that the Fed will delay raising rates until next year. Fed-fund futures show a 32 percent chance of a rate increase in December, up from 27 percent on Wednesday. The dollar rose for a third day against 10 major currencies.
“Upbeat U.S. data kept alive prospects of the Federal Reserve raising interest rates before year-end,” Stewart & Mackertich Wealth Management Pvt said in a report. A stronger dollar is also weighing on the precious metal, it said.
Gold for immediate delivery declined 0.4 percent to $1,173.01 an ounce by 11:03 a.m. in London, according to Bloomberg generic pricing. It reached $1,191.67 on Thursday, the highest level since June, and is little changed this year.
Higher borrowing costs curb the appeal of bullion because it doesn’t pay interest, unlike competing assets. Holdings in gold-backed exchange-traded products fell 5.4 metric tons on Friday, cutting the week’s increase to 8.3 tons, data compiled by Bloomberg show.
Silver for immediate delivery lost 0.9 percent to $15.9086 an ounce. Platinum was little changed and palladium declined 1 percent to $689.70 an ounce.