Gold Erases Gains in New York, London After Consumption Drops

Bloomberg reports:

By Claudia Carpenter

July 31 (Bloomberg) -- Gold erased gains in London and New York after the U.S. reported a drop in personal consumption, paring a drop in the dollar.

U.S. personal consumption fell 1.2 percent in the second quarter, the Commerce Department said today, more than the 0.5 percent median decline forecast in a Bloomberg News survey. Gold has moved in an opposite direction to the dollar every month since April, resuming a pattern in five of the past seven years.

The dollar is the “strongest driver” of gold prices, Alan Heap, a Sydney-based analyst of Citigroup Inc., wrote in a report today.

Gold futures for December delivery fell $1.40, or 0.2 percent, to $935.90 an ounce as of 8:41 a.m. on the New York Mercantile Exchange’s Comex division, paring the monthly gain to 0.6 percent. Bullion for immediate delivery dropped 0.1 percent to $933.74 after earlier rising as much as 0.6 percent.

The dollar dropped 0.3 percent, after earlier falling as much as 0.6 percent.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net