Gold
futures fell for the second straight day as the U.S. economy expanded
more than estimated, crimping demand for the precious metal as an
alternative investment.
The
price dropped 2.2 percent last week on concern that the Federal Reserve
will boost interest rates next year. Traders predict a 69 percent
chance that the central bank will raise borrowing costs by September,
futures data show. The U.S. economy expanded at a 5 percent annual rate
in the third quarter, the biggest advance in 11 years. The government
had estimated growth in gross domestic product at 3.9 percent.
The
GDP report sent the Dow Jones Industrial Average to a record high. Gold
is heading for a consecutive annual loss for the first time since 1998
after a plunge in oil prices reduced the metal™s appeal as an inflation
hedge. The dollar™s rally against a basket of 10 currencies to a
five-year high cut demand for bullion as a store of value.
Gold
futures for February delivery fell 0.1 percent to $1,178.60 an ounce at
11:05 a.m. on the Comex in New York. Yesterday, the price dropped 1.4
percent, the biggest decline for a most-active contract since Dec. 5.
Today, aggregate trading was 32 percent below the 100-day average for
this time, according to data compiled by Bloomberg.
Source : Bloomberg
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