Gold Settles Lower at $1,575 on Wall Street Gains

Gold fell 1.5 percent on Tuesday, its biggest one-day drop in more than a month, as economic optimism lifted U.S. equities to near a record high and weakened bullion’s safe-haven appeal.

Silver dropped more than 2 percent to an eight-month low, and platinum group metals also declined sharply in a metals sell-off.

Bullion came under pressure as the U.S. equities benchmark S&P 500 index climbed to within striking distance of an all-time intraday high.

“The hot money is going toward the S&P 500 right now,” said Jeffrey Sica, chief investment officer of SICA Wealth Management, which oversees more than $1 billion in assets.

“There is an overwhelming sentiment that growth will remain slow and not inflationary, and that has eliminated some of the momentum investors in gold,” Sica said.

The gold market could take a cue from Friday’s Labor Department snapshot of the U.S. job market, also an important gauge for Federal Reserve monetary policy. Signs of economic improvement could prompt the Fed to halt its bullion-friendly bond-buying program earlier than expected.

Spot gold fell 1.4 percent to $1,576.45, having earliest hit $1,573.39, its lowest price since March 8.

(Poll: Will Gold End the Second Quarter Higher or Lower?)

U.S. gold futures settled down $24.90 to $1,575.10 an ounce, with trading volume about 25 percent below the 30-day average, preliminary Reuters data showed.

Spot silver earlier fell to its lowest level since mid-August at $27.16 an ounce. It was later down 2.5 percent to $27.32 an ounce.

Platinum was down 1.2 percent to $1,570.74 an ounce, while palladium fell 1.7 percent to $765.47 an ounce.

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