Gold Prices Retreat on U.S. Stock Rally, Upbeat Data
DOW JONES & COMPANY, INC. 3:52 PM ET 08/27/15
Gold prices fell on Thursday as gains in U.S. equities on the back of upbeat economic data and a stronger dollar dulled trader interest in haven assets.
Gold for December delivery, the most actively traded contract, fell $2, or 0.2%, to settle at $1,122.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
A rally in U.S. stocks triggered by brighter economic data pushed gold to its fourth straight day of losses as investors revisited their expectations for higher interest rates. Gold has been under pressure in recent months as some investors wagered that an expected increase in U.S. borrowing costs would push prices lower. The precious metal doesn't pay interest or dividends and struggles to lure investors away from yield-bearing assets when rates climb.
The U.S. economy grew 3.7% in the second quarter, beating a 3.3% expansion economists had predicted.
U.S. equities rallied in response to the data, with the the S&P 500 index recently up 2%.
"There's no rush to get into gold here," said Bill O'Neill, co-founder of commodities investment company Logic Advisors.
Mr. O'Neill said that gold prices already reflect investors' expectations for a modest increase to U.S. interest rates.
"We're going to see more erosion in gold prices and gradually lower levels," he said. "Gold has basically discounted that the Fed is going to go up slowly," he said.
Going forward, some analysts predicted that market uncertainty will come to gold's aid as investors once again start selling across other asset classes.
"The dip in gold may well find support as there may be more market anguish ahead," William Adams, head of research at Fastmarkets, said in a note.
Settlements:
LBMA Gold Fix PM $1,119.00; Previous PM $1,120.75
Dec gold $1,122.60, down $2.00; Range $1,117.00-$1,128.50
Dec silver $14.427, up 35.9 cents; Range $14.075-$14.585
Oct platinum $1,006.00, up $25.80: Range $982.80-$1,009.10
Dec palladium $567.90, up $38.90; Range $531.95-$568.85
-Ese Erheriene contributed to this article.
-- Write to Tatyana Shumsky at tatyana.shumsky@wsj.com
(END) Dow Jones Newswires
08-27-151552ET
Copyright (c) 2015 Dow Jones & Company, Inc.
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