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Gold ends about 1% lower on strong US growth data

AP

Gold settled below $1,300 an ounce on Thursday for the first time since mid-February, as encouraging U.S. economic growth in the fourth quarter diminished the metal's appeal as a hedge.

A stronger dollar and technical weakness after bullion broke through psychological support at $1,300 an ounce and its 200-day moving average at $1,296 an ounce also triggered selling, traders said.

The U.S. economy grew a bit faster than previously estimated in the fourth quarter and new claims for jobless aid dropped to a near four-month low last week, suggesting the economy has plenty of momentum to break out of its winter chill.

"Gold is under the pressure after the strong GDP report fueled anticipation of higher economic activities in the second and third quarter," said Frank McGhee, head precious metals dealer at Chicago commodities brokerage Alliance Financial LLC.

Symbol
Name
Price
 
Change
%Change
Volume
GOLD
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GOLD/USD
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SILV/USD
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SILVER
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PALL/USD
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PLAT/USD
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U.S. gold futures ended the trading session 0.7 percent lower at $1,294.70 an ounce.

Meanwhile, spot gold dropped 0.9 percent to $1,292 an ounce, having earlier hit $1,291.36 - a six-week low

So far this week, the metal was down about 3 percent. It hit a six-month high at $1,391.76 earlier in March on geopolitical tensions.

Holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust fell 1.8 tonnes to 816.97 tonnes on Wednesday, after declining 2.70 tonnes in the previous session. That has cut its net inflow for the year to 18.8 tonnes.

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