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Gold Futures Drop After U.S. Manufacturing Unexpectedly Expands
Sep 2,2011 10:18CST
industry news
Source:SMM
Gold fell for the first time in three days after unexpected growth reported in US manufacturing bolstered optimism in the economy and eroded demand for the precious metal as a haven asset.

Sept. 2 (Bloomberg) -- Gold fell for the first time in three days after a report showing unexpected growth in U.S. manufacturing bolstered optimism in the economy and eroded demand for the precious metal as a haven asset.

The Institute for Supply Management reported its factory index was at 50.6 last month, topping analyst estimates’ of 48.5. Prices also fell as the dollar headed for the biggest gain in two weeks against a six-currency index. Prices touched a record $1,917.90 an ounce on Aug. 23 amid escalating debt woes in the U.S. and Europe.

“The manufacturing data is putting some pressure on gold, and a stronger dollar is not helping matters,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “We will probably see some consolidation at current levels.”

Gold futures for December delivery fell $2.60, or 0.1 percent, to settle at $1,829.10 on the Comex at 2 p.m. in New York. Earlier, the price fell as much as 0.9 percent. The metal climbed 12 percent in August, the biggest monthly gain since November 2009.

Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 28 percent this year, outperforming global stocks, commodities and Treasuries.

Fed Action
Minutes of the Aug. 9 Federal Reserve meeting showed some policy makers favored “more substantial” measures to boost the U.S. economy than the current pledge to hold rates at a record low for the next two years.

“Everywhere you look in terms of the macro environment, there are reasons to see why gold should be higher,” David Wilson, a metals analyst at Societe Generale SA, said today in a Bloomberg Television interview.

The U.S. Mint sold 112,000 ounces of American Eagle gold coins last month, up 74 percent from July and the most since January, its website showed. Silver-coin sales advanced 24 percent to 3.68 million ounces.

Silver futures for December delivery slipped 23.6 cents, or 0.6 percent, to $41.532 an ounce on the Comex.

On the New York Mercantile Exchange, platinum futures for October delivery retreated $3.30, or 0.2 percent, to $1,852.90 an ounce. Palladium futures for December delivery declined 5 cents to $790.40 an ounce.

 

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