Spot gold declined for the first time in three sessions on speculation that signs of a strengthening U.S. economy will encourage the Federal Reserve to curb monetary stimulus.
Building permits in the U.S. increased 6.2% in October to a 1.03 million annualized rate, the most since June 2008, the Commerce Department said today. Home prices in 20 U.S. cities rose by the most since February 2006 in the 12 months through September, the S&P/Case-Shiller index showed. Through yesterday, bullion tumbled 25% this year.
“Prices continue to remain under pressure as the U.S. data shows the economy may be improving,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview. “People see very few reasons at the moment to be bullish on gold.”
Gold for immediate delivery lost 0.8% to $1,241.58 an ounce at 2:24 p.m. in New York. On the Comex, bullion futures for February delivery (COMEX:GCG14) slipped less than 0.1% to settle at $1,241.50 an ounce. Trading was 89% higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Gold is set for the first annual drop in 13 years. Some investors lost faith in the metal as a store of value. Minutes from the Fed’s October meeting released last week showed policy makers expected further improvement in the labor market to warrant trimming stimulus in the coming months.
Silver for immediate delivery fell 1.8% to $19.8698 an ounce. Palladium slipped 0.3% to $718.92 an ounce. Platinum dropped 0.8% to $1,375.20 an ounce, after touching $1,369.29, the lowest since Oct. 15.
The Association of Mineworkers and Construction Union at Anglo American Platinum Ltd.’s South African mines postponed to next year a decision on a possible strike over pay at the world’s biggest producer of the metal. The National Union of Mineworkers has been striking at Northam Platinum Ltd. since Nov. 3.