By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell by 1% Thursday, with profit-taking setting in following a strong performance for the precious metal in the wake of recent data on the U.S. economy.
Gold for April delivery GCJ3 -1.04% dropped $17.60, or 1.1%, to $1,664 an ounce on the Comex division of the New York Mercantile Exchange. Prices for the contract had gained 1.1% on Wednesday.
Although data on U.S. gross domestic product released Wednesday were “bullish for gold, with GDP declining 0.1% ... we do not anticipate a near-term run-up in gold,” said Jeffrey Wright, senior analyst at Global Hunter Securities.
News that GDP contracted in the fourth quarter of 2012 and anticipation ahead of a statement from the Federal Reserve drove the action in gold Wednesday. After the Comex session ended, the central bank committed to maintain its policy of monetary easing. Read: U.S. economy shrinks 0.1% in fourth quarter
Confirmation that the Fed will continue its bond-buying program “caused investors to use the precious metal as an inflation hedge,” said Miguel Audencial, sales trader at CMC Markets. See: Fed maintains aggressive easing stance.
Still, gold’s pullback Thursday came ahead of key U.S. nonfarm-payrolls data due out Friday, following on Wednesday’s ADP report showing an increased number of private-sector jobs added to the U.S. economy in January.
“Gold’s bullish reaction to the GDP data largely overshadowed the release of U.S. private payrolls data, which was ostensibly gold-bearish,” said metal analysts at HSBC.
“We believe that gold and silver may retrace modestly in the immediate term on profit-taking, but the overall trajectory for both appears higher,” they said.
Silver for March delivery SIH3 -1.72% lost 50 cents, or 1.6%, to trade at $31.67 an ounce.
Along with a reevaluation of the U.S. economic recovery and a reaffirmation of highly accommodative monetary policy, a recent rally for the euro and a pullback in gold exchange-traded funds “leave room for investors to rebuild positions,” the HSBC analysts said.
U.S. data out Thursday were mixed, with first-time jobless claims last week jumping 38,000 to a more than expected 368,000. See: Initial jobless claims jump 38,000 to 368,000.
The Chicago purchasing managers index, meanwhile, rose to 55.6% in January to mark the best performance in nine months. Personal income soared in December by its fastest pace in eight years, while consumer spending rose 0.2%, in line with expectations. See: Income soars in Dec. on dividend payments.
Meanwhile, platinum-group metals may come under greater near-term pressure than either gold or silver, the HSBC analysts said, as “physical demand in the U.S. may not be robust, given the recent GDP data.”
April platinum PLJ3 +0.26% shed $15, or 0.9%, to $1,674.30 an ounce, with March palladium PAH3 -0.71% declining $9.65, or 1.3%, to $741.75 an ounce.
March copper HGH3 -0.12% slipped 0.5 cent, or 0.1%, to $3.75 per pound.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Sarah Turner is MarketWatch's bureau chief in Sydney. Follow her on Twitter @SarahTurnerMKTW.
