Gold loses shine, heads for biggest loss since 1920
Gold plunged to a 34-month low, set for a record quarterly drop, as US economic data strengthened the case for the Federal Reserve to reduce stimulus. Silver futures fell to the lowest since August 2010.
Gold plunged to a 34-month low, set for a record quarterly drop, as US economic data strengthened the case for the Federal Reserve to reduce stimulus. Silver futures fell to the lowest since August 2010.
US durable-goods orders rose more than expected, home sales advanced to the highest in almost five years and consumer confidence climbed, data showed.
About US$60 billion was wiped from the value of precious metals exchange-traded product holdings this year as some investors lost faith in them as a store of value and speculation grew that the Fed will taper debt-buying that helped gold cap a 12-year bull run last year. A lack of accelerating inflation and mounting concern about the strength of the global economy is hurting silver, platinum and palladium, which are used more in industry than gold.
"The sell-off is a continuation of the response to concerns over the Fed tapering stimulus," said Bart Melek, the head of commodity strategy at TD Securities in Toronto. "We'll need to see evidence of more physical buying and demand from central banks before it really turns around. No one wants to catch a falling knife."
Gold for immediate delivery fell up to 4.2 per cent to US$1,224.18 an ounce, the lowest since August 24, 2010, in London. Bullion for August delivery dropped 3.2 per cent to US$1,234.30 in New York.
The metal pared earlier declines after a report showed the US economy expanded less than projected in the first quarter.
