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Gold falls sharply amid strong economic data

Xinhua, May 1, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell sharply on Monday amid stronger-than-expected U.S. Economic data.

The most active gold contract for June delivery dropped 12.8 U.S. dollars, or 1.01 percent, to settle at 1,255.50 dollars per ounce.

An initial forecast for real GDP growth in the second quarter of 2017 stands at 4.3 percent, the Federal Reserve Bank of Atlanta released on May 1.

It is considered to be a significant increase when compared with the advance estimate of U.S. first-quarter real GDP growth, at 0.7 percent, as released by the U.S. Bureau of Economic Analysis on April 28.

That would be the strongest growth, said some economists, since the 5 percent gain in the third quarter of 2014.

Meanwhile, the U.S. Dow Jones Industrial Average rose by 21.95 points, or 0.11 percent as of 1820 GMT. Analysts note that when equities post gains, the precious metal usually falls.

Gold was given additional pressure as a report released on Monday by the U.S. Department of Commerce showed that personal income increasing 40 billion U.S. dollars (0.2 percent) in March and personal consumption expenditures (PCE) up 5.7 billion dollars. High demand of consumption will in turn boost the economic growth.

Another barometer, the U.S. Dollar Index rose by 0.07 percent to 99.08 as of 1820 GMT. The index is a measure of the dollar against a basket of major other currencies. If the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors. Endit