Chicago - XINHUA
Gold futures on the COMEX division of the New York Mercantile Exchange ended lower Tuesday, the fifth drop in six sessions, as official data showed the cost of living in the United States rose less than forecast, crimping the appeal of gold as a safe heaven. The most active gold contract for December delivery fell 8.4 U. S. dollars, or 0.64 percent, to settle at 1,309.4 dollars per ounce. Gold is headed for the largest annual decline since 1997 as some investors lost faith in the metal amid an equity rally and low inflation. The Labor Department said the consumer price index (CPI) rose 0. 1 percent in August from July, compared with the forecast of a 0.2 percent gain in a Bloomberg survey. Market analysts say, with less- than-expected growth in CPI numbers, the appeal of gold as an inflation hedge is diminished. In addition, the market is turning its focus to an ongoing monetary policy meeting of the U.S. Federal Reserve at which the U. S. central bank is expected to start a small tapering of its stimulus measures. Most economists expect the Fed to reduce its 85 billion U.S. dollars a month in Treasury and mortgage-securities purchases by 10 billion dollars, according to MaketWatch report. Gold fell 21 percent this year through Tuesday as speculations that the Fed will slow stimulus curbed demand. Silver for December delivery fell 22.5 cents, or 1.02 percent, to close at 21.784 dollars per ounce.