Gold slid on Thursday to a two-week low after a mixed bag of U.S. economic data prompted selling ahead of next week's U.S. Federal Reserve policy meeting.
Gold prices ended the U.S. day session moderately lower Thursday. After trading near steady overnight, the precious metal came under selling pressure following a batch of U.S. economic data released Thursday morning. December gold was last down $7.70 an ounce at $1,318.50. December silver was last down $0.011 at $19.055.
We were treated not to just a raft of soft U.S. data but a flotilla of it. Initial jobless claims were steady, representing the only positive news on the day.
In a phone interview with Kitco News, George Milling-Stanley, head of gold strategy at State Street Global Advisors – the firm behind the world’s largest gold-backed exchange-traded fund SPDR GLD – said that markets are “overreacting to a potential interest rate hike.”
“I don’t think the gold market has anything to fear from U.S. monetary policy,” he said. “Even if rates rise 1% this year, the important thing to remember is that real rates will still be negative and that is ultimately positive for gold.”
Commerzbank analysts said in a note that "Gold prices will remain under pressure in the short term, partly because investor expectations are already very high and partly because financial market participants are not feeling any particular fear at present, which is why demand for gold as a 'safe haven' is tending to decline."
Reference: KITCO, Reuters
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