Gold futures slumped below $1,600 for the first time since August after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is recovering, easing pressure for more stimulus measures.
Stronger U.S. growth benefits the world economy, Bernanke said at a G-20 meeting in Moscow. Billionaire investors George Soros and Louis Moore Bacon cut their stakes in exchange-traded products backed by gold last quarter, government filings showed. Through yesterday, the Standard & Poor’s 500 index of equities gained 6.7 percent this year, while gold dropped 2.4 percent.
“The economy is doing better and equities are winning, so people don’t want gold,” Michael Gayed, the chief investment strategist at New York-based Pension Partners LLC, which advises on more than $150 million in assets, said in a telephone interview. “No one wants to invest in safe-haven assets.”
Gold futures for April delivery slumped $30.10, or 1.8 percent, to $1,605.40 an ounce at 11:06 a.m. on the Comex in New York. Earlier, the price touched $1,596.70, the lowest for a most-active contract since Aug. 15. The metal headed for the biggest weekly decline since June.
Manufacturing in the New York region unexpectedly expanded in February, and consumer confidence rose to a three-month high, separate reports showed today.
On Jan. 3, minutes from the Fed showed $85 billion in monthly bond purchases, the third round of so-called quantitative easing, probably will end sometime in 2013.