Prices pressured by mostly upbeat U.S. economic data
Bullion metals ended close to a percent lower on Thursday, 21 November 2013 at Comex. Comex gold prices ended the U.S. day session moderately lower reflecting the additional losses that occurred after the futures market closed on Wednesday. Gold futures fell on Thursday and tallied a two-session loss of more than 2%, pressured by mostly upbeat U.S. economic data and hints that the Federal Reserve will decide to taper its gold-supportive stimulus program at one of their next few meetings.
Gold for December delivery dropped $14.40, or 1.1%, to settle at $1,243.60 an ounce on the New York Mercantile Exchange.
December silver fell 12 cents, or 0.6%, to $19.93 an ounce.
The U.S. Federal Reserve's Open Market Committee minutes were deemed somewhat hawkish by the market place and that helped to sink the gold and silver markets. Several members of the committee said at their October meeting they could see the Fed tapering its $85 billion-a-month bond-buying program at one of its next few meetings. The committee members also saw the U.S. economy growing at a moderate pace.
It was reported Thursday that China's HSBC preliminary manufacturing report for November came in at 50.4 versus the final reading of 50.9 in October. Any reading above 50.0 suggests economic growth. However, the market place took the China data as a bit downbeat. That was also a bit bearish for the raw commodity markets.
In other overnight news, European Central Bank president Mario Draghi said the European Union has seen disinflation for several months. He said he does not expect deflation to grip the EU, but added the ECB needs to take measures to prevent deflation, such as the recent interest rate cut by the ECB.
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On the economic front, weekly initial claims dropped by 21,000 to 323,000 (consensus 333,000). The Department of Labor acknowledged, however, that the seasonal adjustments from the Veterans Day holiday may have played a role in the sharp decline.
Separately, producer prices declined 0.2% (consensus -0.2%) in October due to lower energy prices while core PPI, which excludes food and energy, increased 0.2% (consensus 0.1%). Over the last 12 months, PPI is up just 0.3% while core PPI has risen a tame 1.4%.
Lastly, manufacturing activity softened in November as the Philadelphia Fed's Business Outlook dropped to 6.5 from 19.8 in October. The consensus expected the index to fall to 11.9. Employment levels deteriorated notably as the Number of Employees Index fell to 1.1 from 15.4.
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