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Gold continued to slide down for a fourth straight day today putting it on track to have a losing month behind the rate hikes speculation due to the strengthening of the US economy.
Spot gold lost as much as 0.2% today for a price per ounce of $1,294.36 and was trading early morning Singapore time at $1,295.59. Should the precious metal close the day on a lower note it will mark the its longest losing streak since June of fourth consecutive daily declines. It has lost 2.4% this month.
Contracts for the commodity with a delivery date in December traded on New York’s Comex at the price of $1,296.10 per ounce, down slightly from yesterday’s $1,296.90. Gold has recovered 7.8% of its value so far in 2014 after a sharp drop last year where it fell 28% partly due to the Federal Reserve hinting at it would begin reducing its monthly bonds purchases.
The US central bank said in a statement on July 30 that despite the momentum being gathered by the world’s largest economy, the labor market still has considerable room to improve. Additional data is expected out tomorrow which may show that another batch of at least 200,000 new jobs were created for a sixth straight month.
Cinda Futures Co. analyst Lv Jie says that, “Positive U.S. economic data is good for the dollar and bad for gold. Geopolitical concerns still exist for support but the longer-term downtrend is unchanged as the U.S. moves toward tighter monetary policy.” Persisting unrest in Ukraine that has led to additional sanctions on Russia and the ongoing offensive by Israeli forces in Gaza are providing the support for gold.
Bloomberg data shows that precious metals backed exchange traded products recorded an inflow in the amount of $536.81 million for the month as of July 29th. It had outflow of $319 million during the first six months of the year.
