Gold fell to the lowest in almost four weeks amid signs of slowing U.S. growth and as the dollar gained on speculation that European Union leaders will struggle to solve the debt crisis. Silver slumped to the cheapest in 19 months.
The number of applications for U.S. unemployment benefits hovered last week near the highest level of the year, the Labor Department said. EU leaders meet today and tomorrow for the 19th summit on battling the fiscal turmoil. This quarter, gold has dropped 7.3 percent, heading for the biggest decline in eight years, while the dollar has gained 4.9 percent against a basket of six currencies.
“Gold is under pressure because the U.S. economy is showing no signs of strength,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “People are moving to the dollar since there is very little expectation the European leaders will find a solution.”
Gold futures for August delivery dropped 1.8 percent to settle at $1,550.40 an ounce at 1:57 p.m. on the Comex in New York, the largest decline since June 21. Earlier, prices fell to $1,547.60, the lowest since June 1.
“The precious-metals complex is at a very critical juncture,” Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama City, said in a telephone interview. “Deflation concerns have come back to the forefront, and gold is selling off in sympathy with cyclical commodities.”
Silver futures for September delivery slumped 2.6 percent to $26.291 an ounce on the Comex, after touching $26.105, the lowest since Nov. 18, 2010.
On the New York Mercantile Exchange, platinum futures for October delivery dropped 1.7 percent to $1,389.30 an ounce, after earlier sliding to $1,386.70, the lowest price this year. Palladium futures for September delivery slumped 2.7 percent to $563.90 an ounce, falling the most since May 23.
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