Gold Drops to $1295 on U.S. Economic Growth

Gold held overnight losses to trade below $1,300 an ounce on Thursday and looked likely to extend declines to a fourth day as optimism over U.S. economic growth curbed safe-haven appetite for the metal.  Spot gold was flat at $1,295.20 an ounce by 0021 GMT, after dropping 0.3 percent in the previous session.

The Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the U.S. economy and expressed some comfort that inflation was moving up toward its target.  After a two-day meeting, Fed policymakers took note of both faster economic growth and a decline in the unemployment rate, but expressed concern about remaining slack in the labor market.

Data on Wednesday also showed that the U.S. economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked. Gross domestic product expanded at a 4 percent annual rate after shrinking at a revised 2.1 percent pace in the first quarter.


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