Gold Drops as US Data Favours Tapering

Gold retreated the most in more than two weeks as better-than-expected U.S. economic data reinforced the case for the Federal Reserve to slow stimulus measures.
U.S. gross domestic product expanded 2.5 percent in the second quarter, up from an earlier estimate of 1.7 percent, a Commerce Department report showed. Initial jobless claims dropped to 331,000 in the past week from 337,000 a week earlier, the Labor Department said. Gold rose to a three-month high yesterday on concern that the U.S. and its allies will launch a military strike in retaliation for Syria’s alleged use of chemical weapons.

“The GDP numbers are very big, and puts the story of tapering in September back in the forefront,” Chris Gaffney, the senior market Strategist at EverBank Wealth Management, said in a telephone interview from St. Louis. “The drumming of the Syria war has receded today, taking some premium away from gold.”

via Bloomberg

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