Gold Losses Extend In Fifth Straight Decline
Gold futures fell Tuesday, extending their longest run of declines in three months, as investors wrestled with uncertainty about the Federal Reserve’s timeline for reducing the flow of monetary stimulus.
Stretching out losses from Asia, gold for December delivery fell for a fifth consecutive session, giving up $10.40, or 0.8%, to $1,292 an ounce in electronic trading.
Prices on Monday dropped $8.10, or 0.6%, an ounce on the New York Mercantile Exchange after a better-than-expected reading on U.S. service-sector activity in July.
Stimulus efforts by the Fed have been seen as supportive for gold prices, but the central bank has said it expects to slow the pace of its bond buying by the end of this year if the economy continues to improve in line with its forecasts.
Feeling the weight of a handful of upbeat economic data points, gold prices last week fell 0.9%, the first weekly loss in four, as money managers reduced their bullish positions on the precious metal.
“After seeing the gold price stall at technical resistance levels around the $1,340/oz area, as U.S. economic data point toward better growth and strengthen the case for quantitative tapering, specs started to exit [net-long positions] while adding back shorts,” TD Securities said in a report about Commodity Futures Trading Commission data for the week ended July 30.
Gold futures on Monday dropped sharply in the milliseconds before the Institute for Supply Management said its service index jumped to 56% in July from 52.2% in June. Economists had expected an increase to 53.1%, according to a MarketWatch survey.
In another gloomy signal for gold, Dallas Federal Reserve Bank President Richard Fisher on Monday said the fall in the U.S. unemployment rate to 7.4% in July means the Fed is closer to slowing its asset purchases from $85 billion a month.
Gold prices on Friday managed to pare losses after the Labor Department said the economy created a smaller-than-expected 162,000 jobs in July. That spurred speculation about whether the Fed will start easing the asset purchases at its September meeting.
Gold futures have lost nearly 23% this year.
While gold struggles, speculators during the week ended July 30 increased bets for higher platinum prices. However, October platinum on Tuesday fell $3.30, or 0.2%, to $1,444.80 an ounce. Read: Gold not dazzling you? Try silver or platinum
Silver for September delivery gave up 11 cents, or 0.6%, to $19.66 an ounce.
September copper was flat at $3.17 a pound, and September palladium fell $7, or 1%, to $728.20 an ounce.
Source : Marketwatch
