Gold’s weekly gains turned into losses on Friday amid fading expectations for imminent military action against Syria, though the metal remained on track to post gains for the month.
Gold for December delivery dropped below $1,400 U.S. an ounce early in European trading and the losses stuck. It was last down $18.70, or 1.3%, to $1,394.20 U.S. an ounce, on pace for a third consecutive session of declines. The last time gold settled below $1,400 U.S. an ounce was Aug. 26
Silver was also getting hit hard, with December futures off 58 cents, or 2.4%, to $23.56 U.s. an ounce
Thursday gold futures fell $5.90, or 0.4%, on the Comex division of the New York Mercantile Exchange after the U.S. government said a decision about launching an attack against Syria hadn’t been made. Such a move would follow an accusation by the U.S. that the Syrian government used chemical weapons against civilians near Damascus last week. Syria denied the accusation. Read Commodities Corner: Gold, oil: Syria is playing a small, tenuous role
The Obama administration was laying the groundwork for unilateral military action against the Syrian regime, which officials said stems from a U.K. parlimentary vote that rejected the use of force in Syria. A further vote was set for early next week, specifically on whether the U.K. should get directly involved.
As concerns about Syria accelerated, gold futures this week pushed past $1,400 U.S. an ounce and marked a return to a bull market as prices increased at least 20% from intraday lows hit by Comex gold futures in late June.
Losses Friday erased a weekly gold advance of more than 1%, turning it almost into a slight loss. For the month, gold was poised for a 6.3% climb, also pared back from the session’s losses.
Gold may benefit in the short term from seasonal demands stemming from the Hindu festival of Diwali in November and on Syrian tensions, said one expert, suggesting investors sell on a rally to the 200-day moving average around $1,500 U.S.
But investor concerns about a slowdown in monetary stimulus by the Federal Reserve have pressured gold this year, and prices remain down by 16%.
Later Friday, investors will get a look at manufacturing activity in the Chicago region in August, which is expected to show an increase.
Figures on U.S. consumer sentiment and consumer spending showed sluggish spending for the third quarter, up just 0.1% and below expectations for a rise of 0.3%.
In other trading action Friday, December copper was off two cents to $3.24 U.S. a pound.
October platinum lost $4.40, or 0.3%, to $1,518 U.S. an ounce. December palladium slid $10.75, or 1.5%, to $727 U.S. an ounce.
