Gold February futures drop around 2%
Gold futures fell in a sixth straight session Thursday, as demand for the precious metal gave way as US equities rose on the back of positive economic data.
As traders look to boost their cash positions, gold for February delivery fell $27.90, or 1.78%, to $1,536.20 an ounce on the Comex divison of the New York Mercantile Exchange, after losing 3.3% over the past five trading sessions.
Still, futures prices remain on track for a gain of around 8% this year.
Gains in US stocks were driven by upbeat economic data in the US. The National Association of Realtors said pending home sales rose 7.3% in November to the highest level in 19 months.
The pending sales index rose to 100.1 in November from a revised 93.3 in October, now 5.9% above its year-ago level. The figure, which measures signed sales contracts and not closed sales, was expected to rise by 1.4%.
Seasonally adjusted weekly jobless claims for the week ending December 24 rose to 381,000, an increase of 15,000 from the previous week's upward revised figure of 366,000. Initial jobless claims last week were expected to rise to 372,000, according to consensus forecasts.
Still, the figure remained below 400,000, giving investors hope for a strengthened labour market in 2012.
The Chicago Purchasing Managers Index for December edged down 0.1 point to a better than expected 62.5 - the 27th month of expansion. Readings above 50 indicate expansion. Economists expected a reading of 61.
Despite the current weaker demand for gold, Goldman Sachs expects the price of gold to be strong in 2012, given continued record low interest rates, monetary demand for physical gold and muted risk appetite as a result of ongoing debt problems in several economies.
The investment bank expects the gold price to peak at over $1,900 per ounce in 2012, averaging $1,810 per ounce.
Indeed, given the highs seen in gold this year, some analysts believe that those with a longer-term outlook for gold can view current prices as a buying opportunity.
The silver contract for March Thursday edged down 0.03% to $27.23 an ounce, while base metal copper futures were up 0.3% to $3.38 a pound.
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
