Gold Drops As US Economy Posts Gains

Gold futures fell, heading for a weekly loss, as signs of gains in the U.S. economy eroded demand for the metal as a store of value.

Consumer confidence rose from a nine-week low as Americans grew more upbeat about the economy, and jobless claims were close to the lowest in almost seven years, data showed today. The Federal Reserve Bank of Philadelphia factory index, a gauge of regional manufacturing, climbed to 16.6 in April, topping estimates by analysts. Gold dropped 1.5% this week.

“These positive economic reports are pushing gold lower,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “There’s not really a compelling story to buy gold now, other than the situation in Crimea.”

Gold futures for June delivery fell 0.3 percent to $1,299.30 an ounce at 12:16 p.m. on the Comex in New York. Trading was 34 percent below the average in the past 100 days for this time, according to data compiled by Bloomberg. The market will be closed tomorrow for a public holiday.

Through yesterday, gold rose 8.4 percent this year on haven demand linked to the turmoil in Ukraine. Diplomats from the Eastern European country, Russia, the U.S. and the European Union met for talks on the crisis in Geneva today.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza