Gold prices fell sharply in the US on Thursday after data supported the Federal Open Market Committee’s (FOMC) claim that slowing growth in the first quarter was a temporary phenomenon.
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last down $30.60 at $1,179.40 per ounce. Trade has ranged from $1,176.00 to $1,207.40.
US unemployment claims came in at 262,000 – the lowest level since 2000 and below the forecast 297,000. The Chicago PMI rose 6.0 points to 52.3 in April, the highest since January and further from February’s low.
“The decline was on the unemployment claims – that might have shifted opinion in the bullion market on the timing of the rate rise,” HSBC analyst James Steel said in a telephone interview.
But the “market overreacted” to today’s positive data, Steel added.
The numbers follow first-quarter advance GDP growth of 0.2 percent, which missed the expected 1.0 percent and was down from 2.2 percent in the fourth quarter of last year.
But the FOMC, which released a statement on monetary policy last night that stressed the importance of data in its decision when to raise interest rates, attributed slowing economic growth during the winter months and a moderating pace of job growth partly to “transitory factors” such as bad weather.
“The bounce back in activity at the start of second quarter is consistent with a resumption of normal activity following the poor weather and port strikes earlier in the year. In percentage terms, the April jump is similar to last year, although the level of activity is lower overall,” Philip Uglow, chief economist of MNI Indicators, said.
In US equities, the Dow Jones industrial average and the S&P were down 0.5 percent and 0.6 percent respectively. The euro was 0.4 percent stronger at 1.1178 against the dollar.
In eurozone data earlier in the session, the core CPI flash estimate met forecasts of 0.6 percent but the overall unemployment rate for March came in at a higher-than-expected 11.3 percent.
The Germany unemployment change for March was 8,000, missing the forecast 14,000, while the Italian monthly unemployment rate increased to 13 percent, above the predicted 12.6 percent.
In the other precious metals, Comex silver for May delivery was down six cents at $16.00 per ounce. Trade has ranged from $15.815 to $16.70. Platinum for June delivery on the Nymex fell $27.70 to $1,133.80 while the most actively traded palladium contract was at $777.7, up $5.25
Light sweet crude (WTI) futures rose $0.66 or 1.1 percent to $59.26 per barrel in the most active contract.
(Editing by Mark Shaw)
The post Comex gold price sinks on stronger-than-forecast US data appeared first on The Bullion Desk.
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