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.