After stunning gains to start the year, bullion has started to lose its momentum. Prices are down about 1 percent in August as the U.S. economy picks up steam, damping demand for a haven. American payrolls surged in July and wages climbed, pointing to renewed optimism that the jobs market will sustain consumer spending in the second half of 2016.
People don’t believe in the gold rally,” said Frank Holmes, who oversees about $700 million as chief executive officer of U.S. Global Investors in San Antonio, Texas. “You can see this last dip in gold, the employment numbers are so good. When there is good economic data out, rates rise and the price of gold goes down.”
The net-long position in gold futures and options fell 4.3 percent to 255,773 contracts in the week ended Aug. 9, according to Commodity Futures Trading Commission data released three days later. The holdings have dropped 11 percent since July 5, when they reached an all-time high of 286,921.
Bullion has retreated 2.5 percent since reaching a two-year high on July 6 on the Comex in New York to trade at $1,343.40 an ounce on Monday. Open interest, a tally of outstanding contracts in Comex futures, has slumped 13 percent since touching a July peak.
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