Gold Falls to Six-Week Low
Gold futures fell to a six-week low Friday on mounting speculation that the Federal Reserve is moving closer to raising U.S. interest rates.
Gains in consumer confidence are helping to underscore the Fed’s outlook that drags on the economy earlier this year were “transitory.” Sentiment in April increased to the second-highest level in eight years, a private report showed Friday. An improving economy allows the Fed more to room to raise rates, which curb gold’s appeal because the metal generally only offers returns through price gains.
Gold in April fell for the third straight month as the outlook for higher borrowing costs prompts investors to favor assets with better yield prospects, such as equities. Lower metal prices are hurting earnings at mining companies including Goldcorp Inc., which reported Thursday that first-quarter profit missed estimates by analysts.
On the Comex in New York, gold futures for June delivery fell 0.7 percent to settle at $1,174.50 an ounce at 1:42 p.m. Earlier, the price touched $1,168.40, the lowest for a most- active contract since March 20. The metal fell for the third straight week, the longest slump since late February.
