Gold price extends fall after jobless claims, bond selloff

New York (Jun 4)  Gold futures lost ground Thursday, extending a modest decline after data showed the number of workers making first-time claims for jobless benefits fell again.

Gold for August delivery on Comex GCQ5, -0.84% fell $6.30, or 0.5%, to $1,178.60 an ounce, a day after closing at its lowest level in three weeks. July silver SIN5, -1.76%  fell 16.5 cents, or 1%, to $16.315 an ounce.

Gold losses deepened after data showed 276,000 people applied for unemployment benefits in the week ended May 30, down 8,000 form the previous week and reflecting continued improvement in the labor market.

The data reinforces expectations for a strong U.S. jobs report on Friday, analysts said. That would reinforce expectations the Federal Reserve will move sooner rather than later to hike interest rates, a potential negative for gold, which doesn't bear interest.

Hopes for a deal to resolve a long-running debt showdown between Greece and its international creditors, meanwhile, has robbed gold of haven support, analysts said.

And a global bond rout that has sent government bond yields jumping is also a negative for gold, market experts noted. Gold and other assets that offer no yield suffer by comparison.

“The belief that Greece is close to a deal on its debt restructuring has taken the fear trade off the table,” wrote Peter Hug, global trading director at Kitco Metals. “But the primary driver yesterday was the increase in European bond yields driving capital way from risk toward yield.”

In other metals trade, July platinum PLN5, -0.53%  fell $4.40, or 0.4%, to $1,099.70 an ounce, while September palladium PAU5, -0.38%  lost $3, or 0.4%, to $755 an ounce.

July copper HGN5, -0.84%  lost 1.7 cents, or 0.6%, to $2.7095 a pound.

Source: MarketWatch