Gold futures dropped for the first time in more than a week on Tuesday as global equity markets posted gains, buoyed by better-than-expected data from China.
Gold for December delivery fell $19.80 or 1% to $1,873.50 an ounce at the start of trade in New York's Comex. On Monday the December contract rose $39.70, or 2.1%, Monday to settle at $1,891.90. Bullion is up 16% in August, heading for its best monthly performance since September 1999.
Silver for December delivery in New York declined 1% to $42.94 an ounce after earlier touching $44.295, the highest price since May 3. It’s up 39% this year.
MarketWatch quotes Citigroup strategists: “Fears about sovereign defaults and currency debasement have left many investors concerned about switching from equities into government bonds, and cash hardly looks an attractive alternative when real rates are negative. Gold has therefore been the main beneficiary of all these concerns.”
Bloomberg report UBS raised its one-month gold forecast to $1,950 an ounce from $1,725 and increased its three-month outlook to $2,100 from $1,850. The bank’s physical sales yesterday to India, the top global buyer, were the highest since May 10 the Swiss bank announced.