Gold Falls as Global Stocks Advance

Gold futures declined as U.S. and European equities advanced, curbing demand for the precious metal as an alternative asset.

Stocks climbed on optimism over corporate earnings. U.S. consumer confidence soared in July to the highest in almost seven years on the heels of a strengthening labor market, a private gauge showed today. Earlier, gold reached a one-week high on demand for a haven amid escalating conflicts in the Gaza Strip and Ukraine.

The metal headed for a monthly decline, partly on the outlook for an increase U.S. interest rates. The dollar rose to a seven-week high against a basket of 10 major currencies before Federal Reserve officials start a two-day meeting today. Policy makers have tapered monetary stimulus on signs of recovery in the economy.

“It’s hard to establish a long-term position,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Maybe there’s not much need to be long gold here, if the equities aren’t showing a good amount of concern” with tensions in the Middle East and Eastern Europe, he said.

Gold futures for December delivery fell 0.5 percent to $1,299.80 an ounce at 11:03 a.m. on the Comex in New York. Earlier, the price rose as much as 0.7 percent to $1,314.60, the highest for a most-active contract since July 22.

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