Gold Falls on Speculation European Central Banks May Make Sales
Gold fell in New York on speculation central banks in Europe
Gold fell in New York on speculation central banks in Europe may makes sales of the precious metal before a Sept. 26 deadline.
Under the Central Bank Gold Agreement, European banks agreed to limit sales to 500 metric tons a year. They have sold 350 tons as of Sept. 19, the World Gold Council said. Before today, gold had dropped 20 percent from a 26-year high of $732 an ounce in mid-May.
``We still have the possibility of these central bank sales,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ``It has been putting pressure on gold.''
Gold futures for December delivery dropped $1.40, or 0.2 percent, to $584.80 an ounce at 9:14 a.m. on the Comex division of the New York Mercantile Exchange. Prices have climbed each year since 2001 and are up 13 percent in 2006.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.