Tags: Gold Has Biggest Two-Day Drop Since February on Economic Outlook

Gold Has Biggest Two-Day Drop Since February on Economic Outlook

Wednesday, 05 Jan 2011 02:59 PM

Gold fell, capping the biggest two-day drop in 11 months, on speculation that an economic recovery will curb demand for the metal as a haven. Silver tumbled.

Reports showed that U.S. companies added almost three times more jobs in December than analysts forecast and service industries rose at the fastest pace since May 2006. The dollar rose for the third straight day against a basket of major currencies. Gold dropped 3.1 percent yesterday, the most in six months.

“People are feeling warm and fuzzy on the outlook for the economy,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “All the bullish data is weighing on gold and the metals, and boosting the dollar. You’re seeing outflows in risk-aversion assets like gold into higher-risk assets like equities.”

Gold futures for February delivery fell $5.10, or 0.4 percent, to settle at $1,373.70 an ounce at 1:49 p.m. on the Comex in New York. Earlier, the price touched $1,364, the lowest since Dec. 16. The 3.5 percent drop in two days was the biggest since early February.

This week, U.S. reports showed orders placed with factories unexpectedly rose in November and manufacturing expanded at the fastest pace in seven months in December.

In 2010, gold rallied 30 percent, the 10th straight annual gain, amid escalating U.S. and European debt. The metal reached a record $1,432.50 last month.

‘Testing’ Bull Market

“Gold’s bull market is going to be tested,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “It may continue to do so for a few more days and perhaps a few more weeks.”

Silver futures for March delivery fell 31 cents, or 1.1 percent, to $29.198 an ounce, capping a two-day drop of 6.2 percent, the most since early May.

The metal tumbled 5.2 percent yesterday after surging 84 percent in 2010.

Palladium futures for March delivery rose $6.25, or 0.8 percent, to $775.30 an ounce on the New York Mercantile Exchange. The price surged 96 percent last year.

Platinum futures for April delivery dropped $13.30, or 0.8 percent, to $1,734.10 an ounce.

© Copyright 2017 Bloomberg News. All rights reserved.

1Like our page
2Share
StreetTalk
Gold fell, capping the biggest two-day drop in 11 months, on speculation that an economic recovery will curb demand for the metal as a haven. Silver tumbled.Reports showed that U.S. companies added almost three times more jobs in December than analysts forecast and service...
Gold Has Biggest Two-Day Drop Since February on Economic Outlook
350
2011-59-05
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved