“Gold fell to the lowest in a week and headed for the biggest weekly drop since February on speculation a strengthening dollar and U.S. economy will curb demand for a protection of wealth. Precious metals declined.
The dollar rose as much as 0.5 percent versus the euro today and U.S. equities reached a record yesterday as data showed U.S. jobless claims fell more than estimated last week. Minutes of the Federal Reserve’s March meeting released April 10 showed several members were in favor of pulling back on its $85 billion monthly debt-buying program this year. Gold fell below a “crucial” support level of $1,550 an ounce today, said Andrey Kryuchenkov, an analyst at VTB Capital in London
“It’s the dollar rebound,” Kryuchenkov said today by phone. “There is a lack of conviction in gold and with equities performing so well, why bother?”
Gold for immediate delivery fell 0.9 percent to $1,547.45 an ounce by 10:55 a.m. in London. Prices reached $1,545.16 and are down 2.1 percent this week. Bullion for June delivery was 1.2 percent lower at $1,546 on the Comex in New York. Futures trading volume was 8 percent above the average in the past 100 days for this time of day, data compiled by Bloomberg show.
Gold hasn’t closed below $1,550 in London since May. It’s down 7.6 percent this year on mounting optimism that the U.S. will help lead a global economic recovery. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, fell to 1,181.4 metric tons yesterday, the least since May 2010.
