Gold dropped for a fourth day in New York, falling to a five-week low, as signs the U.S. economy is recovering and a stronger dollar curbed investment demand. Other precious metals declined.
The dollar climbed to the highest level since September against the euro before a U.S. report that may show employers added jobs for a third month. A fourth daily drop for gold futures would be the longest losing streak since May. The metal reached a record $1,432.50 an ounce last month.
“Investors are selling gold due to a stronger dollar,” Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “It is of course less safe-haven demand that is playing a role. The market is now looking for a very strong rise” in U.S. payrolls, he said.
Gold futures for February delivery lost as much as $15.20, or 1.1 percent, to $1,356.50 an ounce, the lowest level since Nov. 29, and were at $1,358.80 by 7:53 a.m. on the Comex in New York. Prices are down 4.4 percent this week, the most since February. The metal for immediate delivery in London was 0.9 percent lower at $1,359.22.
Bullion fell to $1,358 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,368.50 at yesterday's afternoon fixing.
Gold jumped 30 percent last year after governments spent trillions of dollars and kept interest rates low to bolster economies following the worst global
recession since World War II. Precious-metals prices rose as investors lost confidence in currencies and became more concerned about the fiscal health of euro-region countries including Ireland.
Indeed, three of the top-five performing mutual funds in 2010 specialized in gold and precious metals.(To see which were the best and worst funds of the year,
Click here.)
Economists have raised forecasts for the number of jobs added by U.S. employers in December after a report this week showed the biggest jump in company payrolls since records began in 2001. The median forecast in a Bloomberg News survey calls for a 150,000 gain last month, ahead of today's data from the Labor Department. Reports this week showed orders placed with factories and manufacturing improved in the U.S.
“We will see some weakness in gold prices in the short term because we are seeing signs that the U.S. economy is certainly in some form of improving trend,” David Lennox, a resource analyst at Fat Prophets, said from Sydney today.
Eleven of 20 traders, investors and analysts surveyed by Bloomberg, or 55 percent, said that gold will decline next week. Eight predicted higher prices and one was neutral.
--Bloomberg News--
