Gold futures tumbled to a 34-month low as U.S. economic data topped estimates by analysts, spurring speculation that the Federal Reserve will cut U.S. monetary stimulus and erode the metal’s investment appeal.

In May, consumer spending rebounded and pending home sales jumped to the highest since 2006, while jobless claims fell last week, reports showed today. The dollar was little changed against a basket of major currencies after climbing in the previous six sessions, reducing demand for gold as a store of value.

“Good economic news removes the need for gold,” said Adam Klopfenstein, a senior market strategist at Archer Financial Inc. in Chicago. “Prices may weaken further.”

Gold futures for August delivery dropped 1.7 percent to $1,209 an ounce at 1:25 p.m. on the Comex in New York. The metal touched $1,206.50, the lowest since August 2010. The price headed for a record quarterly drop amid an equity rally and muted inflation.

The Fed said on June 19 that asset purchases may be scaled back if the economy continues to improve. Through yesterday, gold tumbled 27 percent this year.