Gold down on US manufacturing data, interest speculation
Gold lost some of its recent gains Wednesday, as the dollar pared losses after positive US manufacturing data, while investors assessed the likelihood the Federal Reserve would raise interest rates soon.
Fresh figures published by the Institute for Supply Management showed the country’s manufacturing activity expanded for a third straight month in May, but growth in new orders continued to slow as factories grappled with weak overseas demand and scarce capital spending in the energy sector.
Spot gold was last down $7.9 at $1,207.10 an ounce in New York from Tuesday closing price. The precious metal had gained 0.8% on Tuesday, its biggest single-day percentage gain since May 13 after some 10 days of declines.
While bullion dropped nearly 6% in May, its biggest decline in six months, it is up about 15% so far this year.
Higher US rates would make holding gold unattractive, as the metal pays no interest. It would also lift the dollar, making bullion more expensive for buyers in other currencies.