Gold drops on improving economic prospect

February 3, 2011 11:21 am 

CHICAGO, Feb. 3 — Gold futures on the COMEX Division of the New York Mercantile Exchange declined on Wednesday, as investors expected continued improvement in the U.S. economy. Hikes in equity and U.S. dollar also helped erode gold's appeal.

The most active gold contract for February delivery lost 8.2 dollars per ounce, or 0.6 percent, to settle at 1332.1 dollars.

ADP Employer Services reported on Wednesday that private-sector jobs in the U.S. rose by 187,000 in January, in comparison with economists' expectation of 143,000 job gain.

Besides, statistics showed that manufacturing in the U.S. unexpectedly accelerated in January at the fastest pace in more than six years. European manufacturing also gained.

Traders noted that the pick-up in employment and manufacturing added on to the prevailing sense of economic optimism in the market, so gold could come under some pressure as investors move into other risk assets like equities and industrial metals.

Besides, recent strength in the U.S. stock and currency market lured investors away from their relatively defensive investment in gold. Eased tension in Egypt also reduced the safe-heaven demands.

Silver for March delivery also shed 22.5 cents, or 0.79 percent, to 28.289 dollars per ounce.

Meanwhile, April's platinum dropped 4.4 dollars, or 0.24 percent, to 1828.6 dollars. (PNA/Xinhua)

DCT/LDV/ebp

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