Gold fell for a second straight day as a jump in U.S. retail sales helped temper concern that the recovery is faltering, eroding demand for the metal as a haven.
Retail sales climbed 0.5 percent in July, the most in four months, the Commerce Department said today. Yesterday, the Labor Department said applications for jobless benefits were the lowest since early April. The Standard & Poor’s 500 Index climbed as much as 1.4 percent, and most raw materials also rose. Before today, gold rallied 23 percent this year to a record amid mounting sovereign debt in the U.S. and Europe.
“The market is reacting to the reversal in risk trade,” Tom Pawlicki, a Chicago-based analyst with MF Global Holdings Ltd., said in a telephone interview. “People will want to wait on the sidelines for the prices to come down further.”
Gold futures for December delivery fell $13.80, or 0.8 percent, to $1,737.70 an ounce at 11:04 a.m. on the Comex in New York. Before today, prices climbed 6 percent this week, on course for a sixth straight gain and the biggest since February 2009. Yesterday, it surged to a record $1,817.60.
CME Group Inc (CME), owner of the world’s largest futures market, raised margins on gold contracts by 22 percent as of the close of business yesterday. The minimum amount of cash that speculators must keep on deposit for an initial account increased to $7,425 on a 100-ounce contract from $6,075.
Silver futures plunged after the Comex exchange in New York boosted margin costs by 84 percent in May.
Silver for September delivery were up 1.6 cents at $38.685 an ounce.
Debarati Roy-Bloomberg, Friday August 12, 2011