Gold dropped 1 percent on Thursday as upbeat sentiment on equities and positive US growth data dented the appeal of the safe-haven asset, though the metal was still stuck in its narrowest monthly range in 12 years. Silver dipped to an eight-week low, falling in tandem with other industrial metals, traders said.
The US dollar, in which gold is priced, held firm after US jobless and consumer spending data, taking support from Wednesday's uplift on third-quarter US economic growth. Spot gold was down 0.7 percent at $1,274.51 an ounce by 1:53 pm EST (1853 GMT), having earlier hit its lowest since Nov. 14 at $1,270.11.
The price is up 0.3 percent this month, though it has been stuck between $1,265 and $1,300 throughout November. US gold futures settled down $8.90, or 0.7 percent, at $1,273.20 per ounce, closing the month up 0.2 percent. Silver dropped to $16.30 an ounce, its lowest since Oct. 6 and was last down 0.7 percent at $16.41, headed for a 1.7 percent drop over last month.
"Silver is being sold off as part of the industrial complex," said John Lawrence, senior metals trader for Heraeus Precious Metals in New York. Global equities were on course to finish November with a 13th consecutive monthly gain, though a dive in US technology stocks left investors wondering whether the longest global equity bull run in living memory might be starting to splutter.
"Optimism (in equities) is at record highs, so it should come off a bit, which would be reasonably positive for gold. But the stronger dollar will cap any gains that come on the back of (that)," said Martin Arnold, strategist at ETF Securities. Early in the session a stronger US dollar weighed on gold, but the greenback reversed as investors added bets that the US central bank will continue to unwind its stimulus plan, helping gold to move off its lows.
Bullion is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding gold. Palladium fell 0.4 percent to $1,009.50, but headed for a 3 percent monthly rise. Platinum was up 0.6 percent at $941.80 an ounce, also poised for a 3 percent rise for the month.
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