Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Gold futures fell to the weakest level in six weeks on Friday, capping a second weekly loss, as further signs of recovery in the US backed the case for the Federal Reserve to keep cutting stimulus. Meanwhile, assets in the SPDR Gold Trust, the biggest bullion-backed ETF, remained unchanged on Friday.

On the Comex division of the New York Mercantile Exchange, gold futures for settlement in April rose 0.07% on Friday to settle the week at $1 295.70 an ounce. Prices shifted in a daily range between $1 299.40 an ounce and $1 286.40 an ounce, the weakest since February 13. Gold slid 3 percent this week, the second straight decline.

Bullion has retreated 7.1% since reaching a six-month high of $1 392.60 an ounce on March 17 as the US economy expanded at a faster-than-expected pace and Federal Reserve Chair Janet Yellen said the central banks bond-buying program may be brought to an end this fall, with borrowing costs starting to rise by mid-2015.

“Prices come under pressure when there’s a lack of concern about economic risks,” said Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which manages about $160 billion, cited by Bloomberg. “There’s probably more weakness ahead.”

However, the precious metal rose 7.7 percent this quarter as global growth faltered and as turmoil over Ukraine left Russia and the West involved in their worst conflict since the end of the Cold War.

Fed stimulus outlook

Gold prices were pressured after data showed consumer spending in the US rose in February by the most in three months as incomes increased, adding to evidence the economy is gaining momentum after the unusually harsh winter.

Consumer spending, which accounts for almost 70% of the American economy, rose 0.3% last month, in line with analysts’ estimates and after a 0.2% increase in the previous month that was smaller than previously reported. Incomes also advanced 0.3% in February, in line with analysts’ expectations and matching January’s gain, data by the US Commerce Department showed today.

The US citizens were trying to shrug off the effects of the inclement weather as they rushed out to shop, supported by a labor market that was also gaining traction.

“Looking past some of the noise in the data, the trend is for modestly stronger personal income and spending, which should accelerate throughout the year as the economy builds momentum,” Michelle Meyer, a senior U.S. economist at Bank of America Merrill Lynch in New York, said before the report, cited by Bloomberg.

Friday’s data also revealed that core price, excluding the volatile food and fuel items, inched up 0.1% last month and were up 1.1% from the previous year, the same as in January and in line with analysts’ estimates.

Also fanning negative sentiment, the US economy expanded more rapidly in the final three months of 2013 than previously estimated as consumer spending jumped by the most in three years, while initial jobless claims unexpectedly declined last week, curbing demand for the precious metal as a store of value.

The US economy expanded at a 2.6% annualized rate in the final three months of 2013, slightly below analysts’ expectations of a 2.7% gain, but up from a preliminary estimate of 2.4%, a report by the the Bureau of Economic Analysis showed yesterday. The US gross domestic product grew 4.1% in the third quarter.

Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, were unchanged at 816.97 tons yesterday. Holdings in the fund are up 1% this year after it lost 41% of its assets in 2013 that wiped almost $42 billion in value. A total of 553 tons has been withdrawn last year.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Forex Market: EUR/USD daily trading outlookForex Market: EUR/USD daily trading outlook Yesterday’s trade saw EUR/USD within the range of 1.0957-1.0802. The pair slid 0.98% to 1.0816, after it dropped 0.65% the prior session.At 7:02 GMT today EUR/USD was up 0.35% for the day to trade at 1.0853. The pair held in a daily range […]
  • NVIDIA shares close lower on Tuesday, company preparing to walk away from Arm Ltd acquisition, Bloomberg reportsNVIDIA shares close lower on Tuesday, company preparing to walk away from Arm Ltd acquisition, Bloomberg reports According to a Tuesday report by Bloomberg News, citing sources with knowledge of the matter, NVIDIA Corp (NVDA) is preparing to walk away from its purchase of Arm Ltd from SoftBank Group Corp.NVIDIA had offered $40 billion for the […]
  • Samsung, LG test curved screens in a search for tech breakthroughSamsung, LG test curved screens in a search for tech breakthrough Samsung and LG are testing curved screens for mobile phones and wearable devices. The South Korean companies are competing against each other to deliver flexible displays to their mobile devices. Success in doing so could give them a […]
  • AT&T tempts T-Mobile users with a $450 giftcardAT&T tempts T-Mobile users with a $450 giftcard AT&T Inc. said it will pay T-Mobile Inc. customers as much as $450 to switch to their services, in an unusual move as the competition for subscribers between the wireless rivals gets fierce.T-Mobile has launched an assault on its […]
  • Grain futures gain ahead of USDA reportGrain futures gain ahead of USDA report Grain futures surged on Monday as investors looked ahead into the U.S. Department of Agricultures weekly update on U.S. planting progress. Wheat for July delivery hit a three-week high and traded at $7,1313 a bushel, followed by a decrease to […]
  • Forex Market: CAD/MXN daily trading forecastForex Market: CAD/MXN daily trading forecast Yesterday’s trade saw CAD/MXN within the range of 11.9762-12.0471. The pair closed at 12.0384, gaining 0.13% on a daily basis.At 11:23 GMT today CAD/MXN was down 0.03% for the day to trade at 12.0329. The pair touched a daily low at […]