Tags: Gold | Sinks | economic | Syria

Gold Sinks as Economic Hopes Rise, Syria Fears Fade

Wednesday, 04 Sep 2013 04:41 PM

Gold fell 1.5 percent on Wednesday, slipping below $1,400 an ounce as strong U.S. auto sales boosted economic hopes and fears of a Western-led military strike against Syria lost some of their urgency.

Silver and platinum group metals tumbled along with other industrial commodities. Platinum and palladium each posted their biggest one-day loss in more than two months. Bullion gave up its gains from Tuesday.

It remained unclear whether Congress would approve a military strike against Syria in response to a poison gas attack that killed civilians last month.

"The belief that there will be some form of immediate action and the need for a run to the safe-haven metal have faded. Also, the better the economy, the worse the gold price will look," said Thomas Capalbo, precious metals broker at futures brokerage Newedge.

The Federal Reserve's "Beige Book" report showed that the U.S. economy expanded at a "modest to moderate" pace in most of the country between early July and late August, just strong enough to reinforce the prospect of a pullback in monetary stimulus.

Spot gold dropped 1.5 percent to $1,390.61 an ounce by 3:25 p.m. EDT. U.S. Comex gold futures for December settled down $22 an ounce at $1,390, with volume about 20 percent below its 30-day average, preliminary Reuters data showed.

Prior to Wednesday's selloff, gold had gained 11 percent since Aug. 7 on uncertainty over when the Fed will start to cut its $85 billion monthly bond-buying stimulus program.

"Gold had a very big move and it's digesting it. We ... don't think there are a lot of catalysts to move gold higher immediately," said Rob Lutts, chief investment officer of Cabot Money Management which has $500 million in assets.

Silver, platinum and palladium, precious metals which have strong industrial demand, fell broadly even though data showed U.S. auto sales rose 17 percent in August, their strongest month since October 2007.

Silver dropped 3.1 percent to $23.42 an ounce, its biggest daily drop since July 17.

Platinum fell 2.4 percent to $1,492.28 an ounce, its largest one-day drop since June 26.

Palladium fell below $700 an ounce for the first time in about two months, down 2.9 percent to $695.47 an ounce, also its biggest daily decline since June 26.

© 2017 Thomson/Reuters. All rights reserved.

 
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Gold fell 1.5 percent on Wednesday, slipping below $1,400 an ounce as strong U.S. auto sales boosted economic hopes and fears of a Western-led military strike against Syria lost some of their urgency.
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2013-41-04
Wednesday, 04 Sep 2013 04:41 PM
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