Tags: Gold Has Biggest Weekly Drop Since July on Economic Expansion

Gold Has Biggest Weekly Drop Since July on Economic Expansion

Friday, 07 Jan 2011 03:49 PM

Gold futures fell in New York, capping the biggest weekly loss in six months, on expectations that the U.S. economy’s recovery will erode demand for the metal as a haven.

The dollar was poised for the largest weekly gain since August against a basket of six major currencies. Reports this week signaled an improving U.S. labor market and expansion in manufacturing and services. Gold advanced 30 percent in 2010 and rose to a record last month on concern that a rebound from a global recession would falter.

“As the economy continues to improve, downward pressure will mount on gold,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “There’s less need for a safe-haven asset.”

Gold futures for February delivery fell $2.80, or 0.2 percent, to settle at $1,368.90 an ounce at 1:48 p.m. on the Comex in New York. The price lost 3.7 percent this week, the most since July 2.

The metal fluctuated after the dollar pared earlier gains following today’s report that the U.S. added fewer jobs in December than economists forecast. The unemployment rate fell to the lowest level since May 2009.

“The data isn’t strong enough to create inflation nor weak enough to throw us back into a recession,” said Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago. “You have to play both sides of gold now.”

Silver futures for March delivery dropped 45.5 cents, or 1.6 percent, to $28.671 an ounce, capping a 7.3 percent loss for the week. The metal jumped 84 percent in 2010.

Palladium futures for March delivery fell $6.95, or 0.9 percent, to $755.95 an ounce on the New York Mercantile Exchange. The price fell 5.9 percent this week after surging 96 percent last year.

Platinum futures for April delivery rose $3.20, or 0.2 percent, to $1,738.30 an ounce. The metal fell 2.2 percent this week, after rising 21 percent in 2010.

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Gold futures fell in New York, capping the biggest weekly loss in six months, on expectations that the U.S. economy s recovery will erode demand for the metal as a haven.The dollar was poised for the largest weekly gain since August against a basket of six major currencies....
Gold Has Biggest Weekly Drop Since July on Economic Expansion
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