Gold prices fell the most in three weeks as investors sold equities and commodities including the precious metal to retain cash on mounting evidence of an economic slowdown.
Global stocks retreated after employment and factory data heightened concern that the U.S. may be tipping back into recession. Reports next week may show U.S. home sales fell, Japanese export growth slowed and German business weakened, economists said. The Reuters/Jefferies CRB Index of 19 raw materials dropped to the lowest level since July 29, while the dollar advanced.
“Gold is suffering along with everything else,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “This is general-asset liquidation based on stocks breakdowns.”
Gold futures for December delivery fell $6.60, or 0.5 percent, to close at $1,228.80 an ounce at 1:41 p.m. on the Comex in New York, the biggest loss for a most-active contract since July 27. Gold is up 1 percent this week.
“The slightly stronger dollar is weighing on gold,” said Walter de Wet, an analyst at Standard Bank Plc in London. “With gold above $1,220 an ounce, demand is slowing quite a bit” from physical buyers, he said.
Annual Gain
Gold has climbed 12 percent this year, heading for a 10th straight annual gain and outperforming equities, as investors sought a refuge from the European debt crisis.
The precious metal may drop $20 next week and then rise back to the current level, Integrated Brokerage’s McGhee said.
Bullion for immediate delivery in London declined $4.85, or 0.4 percent, to $1,227.30.
Silver futures for December delivery fell 33.8 cents, or 1.8 percent, to $18.041 an ounce in New York.
Platinum futures for October delivery dropped $13.60, or 0.9 percent, to $1,513.90 an ounce.
Palladium futures for September delivery slipped $9.45, or 1.9 percent, to $476.20 an ounce.
