Gold futures this week dropped to their lowest since June, leaving the price on the brink of a bear market, as signs of a slowing US economic growth sparked a drop in equities and commodities. Silver fell to an eight-month low.
US companies added 158,000 workers in March, the fewest since October, ADP Research Institute reported on Wednesday, while the Institute for Supply Management's index of non-manufacturing businesses fell to 54.4 in March from 56 the previous month.
Standard & Poor's GSCI index of 24 raw materials tumbled 2.1 per cent, heading for the biggest drop since November 7. The S&P 500 equity index slid the most since February 25.
"There is selling across the board," said David Meger, director of metals trading at Vision Financial Markets in Chicago. "The market is reacting to the US data, and it seems as if there is no interest to look at gold as a safe-haven asset."
Gold futures for June delivery tumbled 1.4 per cent to settle at $US1553.50 an ounce in New York, after touching $US1549.70, the lowest since June 28. The metal has declined 7.3 per cent in 2013, after rallying in the past 12 years.
The settlement leaves prices down 18 per cent from a record close of $US1891.90 on August 22, 2011, bringing it closer to the threshold of the 20 per cent benchmark for a bear market.
Global government stimulus has cut the likelihood of further banking and liquidity crises and reduced the need for a protection of wealth, a Credit Suisse report said.
The bank cut its 2013 gold forecast by 9.2 per cent to $US1580 and lowered its silver estimate by 11 per cent to $28.50.
Silver futures for May delivery slid 1.7 per cent to $US26.797 an ounce on the Comex, after dropping to $US26.67, the lowest since July 24. The metal closed more than 20 per cent below its October 4 settlement in New York on April 1.
"Silver is suffering because of weak industrial demand," Tom Power, a senior commodity broker at R.J. O'Brien & Associates in Chicago, said. "Prices may continue to remain under pressure."
Trading was 45 per cent above the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
On the New York Mercantile Exchange, platinum futures for July delivery dropped 2.1 per cent to $US1541.90 an ounce, the biggest drop since February 20. Earlier, prices dropped to $US1534, the lowest since December 31.
Palladium futures for June delivery fell 1.8 per cent to $755.45 an ounce, the second straight loss. Trading was 31 per cent below the 100-day average.