Gold futures on Thursday were performing erratically on commodity markets, swayed by losses to the U.S. dollar and an increased growth estimate for the globe's largest economy issued by the World Bank, according to Bloomberg.
Speculation continues swirling as to how the U.S. Federal Reserve will move forward with its economy-spurring monetary easing program. The World Bank stated in a Wednesday report that the economy of the U.S. is projected to develop 2 percent this year, slightly higher than the 1.9 percent forecast this past January. But that figure is subject to restrictions due to efforts to tighten the fiscal outlook.
The Dollar Index, a gauge of the monetary unit's performance against six competing currencies, dropped 0.2 percent, representing losses for a fourth consecutive trade session. The U.S. dollar and the yellowish metal typically perform the inverse of one another.
"Employment data that came out gave us a clue and it said that things were picking up," chief executive officer Jonathan Barratt with commodity newsletter Barratt's Bulletin in Sydney told the publication on Thursday. "The Fed's going to cut back" on stimulus, the chief said.
At 9:37 a.m. on Thursday, gold futures fell 0.68 percent, a $9.49 loss to $1,379.53 per troy ounce.
Annual gain streak in peril?
Thus far this year, gold futures have dropped roughly 17 percent, putting in peril the annual streak of gains that the yellowish metal has enjoyed. The likelihood that bullion will achieve a 13th consecutive year of gains slips by the day.
Investors are increasingly losing confidence in gold as an asset haven amid the strengthening U.S. economy. That also cast doubt as to how much longer the central bank of the U.S. will continue purchasing assets as part of the drive to boost the economy.
The nation is slated to release economic data about retail sales during the month of May on Thursday, which is likely to impact the price of the precious metal and the decision as to whether to continue spurring the economy with stimulus measures.
Ben Bernanke and policy makers with the central bank, known as the Federal Open Market Committee, are scheduled to convene next week.
Gold tracks Japanese shares
MarketWatch reports gold futures were slumping also because Japanese shares were performing poorly on the markets. The Nikkei index was hovering about bearish levels while concerns grew about whether the government is capable of spurring the globe's third-largest economy with its stimulus measures. Japan has been implementing monetary easing policies since the middle of last December, when Shinzo Abe assumed the prime minister's office.
But consumer spending data in the U.S. for last month is poised to continue driving higher, according to one economist.
"The bottom line: while not very strong, consumer spending continues to show resilience, consistent with the labor-market data – including jobless claims this morning," chief U.S. economist Jim O'Sullivan with High Frequency Economics in Valhalla, N.Y., told MarketWatch on Thursday.
The price of gold futures are increasingly enveloped within a particular range, according to global trading director Peter Hug with Kitco Metals.
"As a trader, you have the option to wait for a break of a significant level and then ride the momentum of the move, or, you can take shots buying short-term support and selling resistance. The latter option has worked well over the past few weeks," the global trading director stated in a Thursday note, according to MarketWatch.
India considers slashing imports
Reuters reports India, the globe's top consumer of the precious metal, was set to cut imports last week.
The subcontinent was considering an increase on tariffs applied to imports of the yellowish metal to 8 percent.
Markets in China, also a top global consumer of gold, were closed in observation of the Dragon Boar Festival holiday, Reuters reports.
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