Tags: Gold Loses 3.1 Percent for Week | Ends at 6-Week Low

Gold Loses 3.1 Percent for Week, Ends at 6-Week Low

Friday, 28 March 2014 04:45 PM

Gold fell to a six-week low Friday in New York as signs of a U.S. economic recovery bolster the case for continued tapering of stimulus by the Federal Reserve.

American consumer spending, which accounts for almost 70 percent of the economy, rose in February by the most in three months as incomes increased, signaling that the economic momentum was returning after an unusually harsh winter. Incomes gained 0.3 percent.

Gold slid 7.1 percent after reaching a six-month high on March 17 as the U.S. economy grew at a more rapid pace than anticipated and Federal Reserve Chair Janet Yellen said the central bank’s debt-buying program may end this year with interest rates starting to rise in early 2015.

“Prices come under pressure when there’s a lack of concern about economic risks,” said Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which manages about $160 billion. “There’s probably more weakness ahead.”

Gold futures for June delivery dropped less than 0.1 percent to settle at $1,294.30 an ounce at 1:56 p.m. on the Comex in New York, after reaching $1,286.10, the lowest for a most-active contract since Feb. 12. Prices slid 3.1 percent for the week, the second straight decline.

The precious metal rose 7.7 percent this quarter as global growth faltered and Russia’s annexation of Crimea sparked the most serious confrontation with the U.S. since the Cold War. Bullish influences are transient, and the U.S. economy will recover from a weather-driven slowdown, pushing prices lower this year, Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in a report last week.

BlackRock View

Prices will trade in a range, “with the low linked to the operating costs of the industry which is around $1,150 to $1,200 an ounce on an all-in cost basis,” Evy Hambro, who manages BlackRock Inc.’s World Mining Fund, said in an interview on Bloomberg Television Friday. “The high is really capped by the potential for further strength in the U.S. dollar.”

Silver futures for May delivery rose 0.4 percent $19.79 an ounce in the Comex.

On the New York Mercantile Exchange, platinum futures for July delivery gained 0.6 percent to $1,407.20 an ounce, while palladium futures for June delivery rose 1.7 percent to $773.70 an ounce.

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Gold Loses 3.1 Percent for Week, Ends at 6-Week Low
Gold Loses 3.1 Percent for Week,Ends at 6-Week Low
Friday, 28 March 2014 04:45 PM
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