Gold headed for the biggest loss in a week amid signs of slowing U.S. growth and as the dollar gained on speculation that European Union leaders will struggle to solve the debt crisis during a summit this week.
The number of applications for U.S. unemployment benefits hovered last week near the highest level of the year, the Labor Department said. EU leaders meet today and tomorrow for the 19th summit on battling the fiscal turmoil. Through yesterday, the dollar gained 4.6 percent against a basket of six currencies in the second quarter. In that time, gold fell 5.6 percent, heading for the biggest quarterly loss in eight years.
“Gold is under pressure because the U.S. economy is showing no signs of strength,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “People are moving to the dollar since there is very little expectation the European leaders will find a solution.”
Gold futures for August delivery dropped 1.5 percent to $1,554.60 an ounce at 11:50 a.m. on the Comex in New York, heading for the largest decline since June 21.
“The precious-metals complex is at a very critical juncture,” Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama City, said in a telephone interview. “Deflation concerns have come back to the forefront, and gold is selling off in sympathy with cyclical commodities.”
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 1.3 percent today.
Silver futures for September delivery slumped 2.2 percent to $26.395 an ounce on the Comex.
To contact the reporter on this story: Debarati Roy in New York at email@example.com
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org