Gold reaches lowest in 2010 as traders shrug off China hoard

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China said it boosted bullion assets to about 1,658 metric tons, less than brokers at GoldCore Ltd. and Sharps Pixley Ltd. expected.
Futures dropped to the lowest since 2010 on Friday as signs of improving U.S. economic growth further diminished the metal’s appeal as a haven.
With investors in the U.S. scoffing at the precious metal, bulls were holding out hope that buying from China could help to buoy demand.
The Asian country is the world’s biggest gold producer and vies with India as the top consumer.
The price rout worsened the outlook for miners, with shares of Barrick Gold Corp. dropping to the lowest since 1991 on Friday.
“I’m shocked by how small the figure is,” Ross Norman, chief executive officer of dealer Sharps Pixley, said by telephone from London, referring to China’s gold reserves. “I don’t think I was alone in thinking they have accumulated three times as much.”
Gold futures for August delivery dropped 1 percent to settle at $1,131.90 an ounce at 1:49 p.m. on the Comex in New York, after touching $1,129.60, the lowest since April 2010.
The reserve figures “were disappointing in some aspects and reflected that China isn’t adding gold as much as people thought it was,” Bernard Dahdah, a precious-metals analyst at Natixis SA in London, said in a telephone interview.
“It begs the question of what’s been happening to the gold produced that hasn’t been taken by the central bank.”
Prices extended losses after a government report showed new-home construction in the U.S. climbed in June to the second-highest level since 2007.
The metal posted a fourth straight weekly decline as Federal Reserve Chair Janet Yellen has indicated that the central bank will increase interest rates this year amid the improving economy.
Higher rates cut the appeal of precious metals because they don’t pay interest or give …Read More

Source:: New Mail