Gold futures reached a 16-week low in New York amid speculation that the U.S. will rebound from its winter slowdown.
The American economy contracted for the first time in three years from January through March, a government report on gross domestic product showed today. Federal Reserve policy makers said at their April meeting that growth has strengthened after adverse weather took its toll. Fewer Americans than forecast filed applications for unemployment benefits last week.
Bullion tumbled 28 percent last year on expectations that the Fed would cut debt buying as the economy accelerates. Assets in global exchange-traded funds backed by gold are near the smallest since 2009, and money managers have cut their bets on a rally by about a third since this year’s peak in March.
“People will largely discount the GDP number because of the harsh winter,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “The sentiment towards gold will remain bearish as the economy has been doing better this quarter.”
Gold futures for August delivery slipped 0.4 percent to $1,254.10 an ounce at 8:53 a.m. on the Comex in New York, after touching $1,251.40, the lowest since Feb. 4.
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