NEW YORK: Gold futures fell in New York on speculation US economic growth will curb demand for the precious metal as an alternative to the US
dollar. Silver also dropped as the dollar gained as much as 0.3% against a basket of currencies.
The Chicago business barometer index probably expanded in December for a third month, economists said before a report scheduled for Wednesday.
Gold futures have slid 11% from a record $1,227.50 an ounce on December 3. "Gold may fall to $900 before investors and the public at large try to buy and hold the market," said Bernard Sin, head of currency and metals trading at bullion-refiner MKS Finance in Geneva. "I am dollar bullish because I believe the US economy can grow."
Gold futures for February delivery fell $3.10, or 0.3%, to $1,095 an ounce at 8:22 a.m. on the Comex division of the New York Mercantile Exchange. Prices for immediate delivery dropped 0.2% to $1,094.23 an ounce and may decline to $900 by the end of the first quarter, Sin said.
This month, gold futures are down 7.4%, heading for the biggest monthly decline since October 2008. The metal has climbed 24% this year and almost quadrupled this decade.
Demand for gold rose as investors bought the metal to hedge against inflation, as a safe haven from financial crisis and as an alternative to the dollar.
Silver futures for March delivery dropped 0.6% to $17.015 an ounce and platinum for April delivery declined 0.2% to $1,473.40 an ounce. Palladium for March delivery rose as much as 2.6% to $399 an ounce, the highest for a most-active contract since July 2008.
