Tags: gold | economic | sales

Gold Drops as U.S. Retail Sales Gain, Easing Economic Concerns

Friday, 12 Aug 2011 04:29 PM

Gold fell for the second straight day as a jump in U.S. retail sales helped temper concern that the recovery is faltering, eroding demand for the metal as a haven.

Retail sales climbed 0.5 percent in July, the most in four months, the government said today. Yesterday, a report showed that applications for jobless benefits were the lowest since early April. The Standard & Poor’s 500 Index was up more than 5 percent in two days. Gold has advanced 23 percent this year amid mounting sovereign debt in the U.S. and Europe. Yesterday, the metal reached a record $1,817.60 an ounce.

“The market is reacting to the reversal in risk trade,” Tom Pawlicki, a Chicago-based analyst at MF Global Holdings Ltd., said in a telephone interview. “People will want to wait on the sidelines for the prices to come down further.”

Gold futures for December delivery fell $8.90, or 0.5 percent, to close at $1,742.60 at 1:45 p.m. on the Comex in New York. This week, the metal jumped 5.5 percent, the most since February 2009 and the sixth straight gain.

CME Group Inc. (CME), owner of the world’s largest futures market, raised margins on gold contracts by 22 percent as of the close of business yesterday. The minimum amount of cash that speculators must keep on deposit for an initial account increased to $7,425 on a 100-ounce contract from $6,075.

Silver futures for September delivery rose 44.5 cents, or 1.2 percent, to $39.114 an ounce on the Comex. The metal, up 2.4 percent this week, has climbed 26 percent this year.

Platinum futures for October delivery rose $4.30, or 0.2 percent, to $1,796.70 an ounce on the New York Mercantile Exchange. This week, the price climbed 4.5 percent, the most since December. The price gained for the fifth straight day, the longest rally since March. The commodity has climbed 1 percent in 2011.

Palladium for September delivery gained $14.40, or 2 percent, to $748.20 an ounce. The metal, up 0.9 percent this week, has dropped 6.9 percent this year.

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Gold fell for the second straight day as a jump in U.S. retail sales helped temper concern that the recovery is faltering, eroding demand for the metal as a haven. Retail sales climbed 0.5 percent in July, the most in four months, the government said today. Yesterday, a...
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Friday, 12 Aug 2011 04:29 PM
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