Bloomberg News

Gold Falls as U.S. Manufacturing Data Ease Concern on Economy

December 01, 2011

Dec. 1 (Bloomberg) -- Gold fell for the first time in four days after a report showed U.S. manufacturing expanded in November at the fastest pace in five months, damping demand for the metal as a haven.

The Institute for Supply Management said its factory index increased to 52.7 from 50.8 in October, with readings over 50 indicting expansion. Economists surveyed by Bloomberg projected 51.8. Gold jumped 3.7 percent in the previous three days, the longest rally in five weeks, after central banks from the U.S. to China moved to ease strains in the financial market.

“When people feel better about the economy, they’ll sell gold,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said today in a telephone interview. “We’re also seeing some profit-taking after gold rallied above its 20- day moving average” at $1,745 an ounce, he said.

Gold futures for February delivery fell 0.6 percent to close at $1,739.80 at 1:45 p.m. on the Comex in New York. Earlier, the most-active contract reached $1,758, the highest since Nov. 17.

The metal has climbed 22 percent this year, heading for the 11th straight annual gain. The price reached a record $1,923.70 on Sept. 6 after central banks increased purchases and investors sought higher returns amid slumping equities and turmoil in currency markets.

Gold will extend the rally in 2012 as interest rates in the U.S. remain “lower for longer,” Goldman Sachs Group Inc. said today in a report.

Silver futures for March delivery fell 0.1 percent to $32.759 an ounce in New York. The price has climbed 5.9 percent this year.

On the New York Mercantile Exchange, palladium futures for March delivery rose 2.9 percent to $630.20 an ounce, the fourth straight gain. Platinum futures for January delivery declined 0.2 percent to $1,557.20 an ounce.

--Editors: Patrick McKiernan, Millie Munshi

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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