2014.09.0223:49:26UTC+00Gold futures head to lowest in 11 weeks with US factories

Futures for gold have fallen to their lowest since June with data showing that manufacturing in the US expanded at its quickest pace in two years.

Gold with a delivery date in December declined by 1.7% to arrive at a price per ounce of $1,265 early afternoon today in New York’s Comex. The drop represents the largest loss among most active contracts since July 14th. The precious metal earlier hit its lowest value since June 17th of $1,263.10. Trading volume was 47% more than the 100 day average based on Bloomberg data.

Bullion fell steeply last year by 28% when the Federal Reserve hinted at slowing down its monetary stimulus. The US central bank recently further reduced its assets purchases at the end of July to only $25 billion marking the sixth straight month the Fed has cut $10 billion in bonds. According to Fed chair Janet Yellen, hikes for bank’s interest rates may come sooner should the labor market continue to improve more rapidly than expected.

Gold declined for the month of August behind speculation on interest rates which also contributed to exchange traded products backed by the metal decreasing in their amount of holdings for the fourth time in the past five months.

Broker Tommy Capalbo from New York’s Newedge Group says that, “Good economic data and concern about the U.S. raising rates is keeping gold under pressure. The political concerns seem to have taken a back seat for now.”

Data released by the Institute for Supply Management today showed that manufacturing orders advanced by the  largest amount in a decade.

Silver with a delivery date in December similarly retreated by 1.7% for a price per ounce of $19.152 after hitting its lowest since June 10 of $19.11.

Palladium futures on the New York Mercantile Exchange went through a 2.9% decline for $883.25 per ounce. The metal has risen 23% so far this year and earlier reached its highest in more than thirteen years at $913 with additional sanctions on Russia, the largest producer in the world, being mulled by members of the European Union.