Gold drops after U.S. economic growth tops forecasts

New York (July 30)  Gold prices pulled back Wednesday as a stronger-than-expected report on the U.S. economy dampened demand for safety plays.

Gold for August delivery  GCQ4 -0.41%   dropped $3.40, or 0.3%, to $1,294.90 an ounce, while September silver  SIU4 -0.21%    edged up 3 cents, or 0.2%, to $20.61 an ounce.

The U.S. economy grew by a 4% annual pace in the second quarter, recovering from contraction in the first quarter, said a preliminary government estimate Wednesday. Economists polled by MarketWatch had expected 3.2% growth.

But geopolitical risks also remained in focus. Israeli artillery on Wednesday hit a United Nations school sheltering more than 3,000 Palestinians in the Gaza Strip and at least 15 were reported killed, said a Wall Street Journal report .

On Tuesday, August gold retreated and settled below $1,300 an ounce as a reading on consumer confidence topped forecasts.

Enlarge Image   Federal Reserve Chairwoman Janet Yellen is pictured testifying before lawmakers on July 16. Investors are awaiting a Fed statement that’s due Wednesday afternoon. 
In other economic news on Wednesday, ADP said the private sector added 218,000 jobs in July, down from the June pace and below estimates. Traders are also awaiting a Federal Reserve statement that’s due at 2 p.m. Eastern. Read more: Is there anything the Fed could say to rock the market? Maybe this tweak

In other metals trading, September palladium  PAU4 +0.07%   gained $2.05, or 0.2%, to $880.35 an ounce, while October platinum  PLV4 -0.22%    lost $2.10, or 0.1%, to $1,482.40 an ounce. High-grade copper  HGU4 +0.53%    for September delivery gained 2 cents, or 0.6%, to $3.24 a pound.

Source: MarketWatch