By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — Gold prices fell in electronic trade Friday, with the precious metal set for sharp, double-digit losses for both the month and the quarter.
Gold for August delivery GCQ3 -0.90% gave up $10.50, or 0.9%, to trade at $1,200.30 an ounce, after having hit an intraday low of $1,179.40.
Gold prices remained on a downward spiral Thursday, even as three Federal Reserve officials suggested the markets had overreacted after Fed Chairman Ben Bernanke’s remarks last week that the central bank may start slowing the pace of stimulus as early as this year.
Such a move would be based on improvement in the economy that’s in line with the Fed’s forecasts, Bernanke had said.
Speculation that the end of Fed stimulus would arrive sooner rather than later hit gold futures hard this month, as so-called quantitative easing has been credited for supporting a rally in gold in recent years.
“Gold needs either inflation or fiat-currency fears to do really well, and neither appears likely in the near term,” wrote Jay Pelosky, principal at J2Z Advisory, in a report about financial market trends for Itaú BBA.
“Having some gold in the portfolio when rates are low seems like low-cost protection, though price action is scary,” Pelosky said.
Some analysts have reported that physical demand for gold remains strong, but futures prices have continued to suffer, with the benchmark gold contract sliding 13.7% in June, and tumbling 24.8% over the second quarter.
Gold was also on track for a weekly fall of more than 6%, building on last week’s decline of 6.9%.
A settlement Friday on the New York Mercantile Exchange below $1,200 would the first for a front-month gold contract since mid-August 2010, according to FactSet data.
Among other most-active contracts in the metals space Friday, September silver SIU3 +1.44% rose 0.2%, or 1.2%, to $18.79 an ounce, while the October platinum contract PLV3 -0.56% fell $16.60, or 1.3%, to $1,312.50 an ounce.
September copper HGN3 +0.13% lost 1 cent, or 0.2%, to $3.05 a pound, and September palladium PAU3 -0.41% dropped $8, or 1.2%, to $642.70 an ounce.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
