Gold futures were trading in negative territory on Thursday, while the second revision of the US gross domestic product (GDP) surprised analysts on the upside.
New York - Gold eased on Thursday, correcting a rally to a three and a half month high in the previous session after the second revision of the US gross domestic product (GDP) surprised analysts on the upside
The price of gold on Comex for December delivery fell 0.52% to $1,411.50 an ounce as of 2:20pm EDT, while silver futures declined 1.40% to $24.050 an ounce at the same time. In the previous session gold peaked to $1,434, its highest level since May 14.
Assets in the SPDR Gold Trust reached the highest point since August 1, gaining 0.1% to 921.03 metric tons, according to the fund’s website. Holdings rose for a second week in the five days to August 23 as prices rebounded from a 34-month low in June.
With higher prices, demand for physical gold in Asia slowed this week.
US data in focus
The second revision of the US gross domestic product (GDP) surprised analysts on the upside, as additionally reported data helped to spur even further expansion of the world's leading economy, which advanced the most since last fall in the three months ended in June.
In the second quarter, the US economy increased at an annualized pace of 2.5% compared to the previous quarter, the Department of Commerce said on Thursday.
Analysts predicted a 2.2% expansion would be reported for the second quarter after the economy climbed 1.1% in the prior three months. The latest figures are still based on incomplete data and will be revised one more time at the end of September.
While it is still not clear if the US and its allies will begin bombing Syria within the coming hours, investors will also shift their attention later in the day to US data and speeches from Federal Reserve (Fed) officials.
Two senior Fed policymakers will be speaking, starting with Fed St. Louis President James Bullard delivering welcoming remarks at the Leadership 2014 Kick-Off event in Memphis, followed by Fed Richmond President Jeffrey M. Lacker speaking in Newport News, Virginia.
Both speeches as well as data will be closely examined as they might provide hints for the Fed's next moves ahead of its Federal Open Market Committee (FOMC) meeting scheduled for September 17-18.
South African miners prepare for strike
South African gold producers are preparing for strikes that could start as early as Sunday, with some companies planning for stoppages of up to three months.
The National Union of Mineworkers (NUM) in Africa gave gold firms a seven-day ultimatum before a strike. Gold mining companies have a week from Saturday to meet the NUM demands for pay rises of up to 60%, or face strike action.
The NUM, the main mining union, walked out of deadlocked wage talks with the companies last Wednesday, setting the scene for a gold industry shutdown that could cost Africa's largest economy over $35 million a day in lost output, based on current spot prices of the metal.
South Africa's gold industry, which once accounted for almost 80% of global bullion output, is in a state of steep decline and the country now produces just 6% of the world's total.
Safe haven status
A number of nations and groups, including Britain, France, Canada and the Arab League, joined the United States in urging a firm response to Syrian President Assad's government, saying the world shouldn't stand by as chemical weapons are used, focusing global markets to safe havens, with commodities at the forefront.
US President Barack Obama expressed on Wednesday that the Syrian government would face "international consequences" for the use of chemical weapons on civilians last week. He pointed out, though, that any military response would be limited in order to avoid dragging the United States into another war in the Middle East.
“This is not about wars in the Middle East; this is not even about the Syrian conflict,” British Prime Minister David Cameron said in televised remarks on Tuesday. “It’s about the use of chemical weapons and making sure as a world we deter their use.”
On Monday, US Secretary of State John Kerry said the world would hold Syria accountable for using chemical weapons.
Defense Secretary Chuck Hagel said US military forces in the region are "ready to go" should President Barack Obama order action against Syria.
French President Francois Hollande spoke at a conference of French ambassadors to express his view.
"France is ready to punish those who took the heinous decision to gas innocents," he stated, showing his stance on the planned action against Assad.
Adding more fuel to the fire, there are several unknowns playing a part in this escalating situation. Firstly, there is Russia, the world’s largest oil producer, which has urged the US not to take military action against Syria. Moreover, OPEC member Iran counts Syria as a close ally and has warned that Western military aggression against Syria could destroy the fragile balance of the entire Middle East in conflict.
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