Most commodity markets slipped early on Thursday, after a slew of US economic readings pointed to pockets of weakness that investors feared could slow demand, and gold eased as investors rotated into equity markets, which have outperformed the precious metal this year.
With most of the 19-commodity markets in the Thomson Reuters-Jefferies CRB index trading lower, the gauge was off by 0.10 percent, after finishing the two previous sessions about half a percent lower. "The Fed has fallen short of its mandate on jobs and inflation, so the (economic) data highlights the need for further accommodation," said Vassili Serebriakov, FX strategist at BNP Paribas in New York.
Gold fell to a four-week low despite prospects of the Federal Reserve continuing its easy money policy, a stance that impelled many investors to buy gold up to its 2011 record highs. For the first time in more than four years, gold has declined for six straight sessions. Its recent price fall spooked investors in favour of other asset markets like equities.
Spot gold prices were down $9.6, or 0.69 percent, at $1,386.60 an ounce. Earlier, it fell as much as 2.5 percent to $1,390.24, its lowest since April 19. Investors grew jittery about the economy when the US Labour Department reported a jump in jobless claims. Global equity markets were mostly flat and the dollar fell against the euro, after reports on US housing, labour and regional business conditions pointed to soft spots in the American economy. Factory activity contracted in the mid-Atlantic region in May, ground-breaking for new homes tumbled in April, and new claims for jobless benefits spiked last week, according to three separate reports.
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