The gold bears are back on the prowl.
Futures in New York fell for the second time in three days amid mounting speculation that a resilient U.S. economy will allow the Federal Reserve to raise interest rates as soon as September. Prices extended declines as a private report showed that American service industries in July expanded at the strongest pace in a decade.
Gold tumbled to a five-year low in late July on the outlook that the Fed will start tightening monetary policy. Higher rates curb the appeal of bullion because it doesn’t pay interest or offer returns, unlike competing assets. Money managers have stayed net-short on the metal for two straight weeks, and banks including Goldman Sachs Group Inc. predict more declines for prices.
On the Comex, gold futures for December delivery fell 0.5 percent to settle at $1,085.60 at 1:44 p.m. in New York. The metal reached a five-year low of $1,073.70 on July 24.
Source : Bloomberg