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Bishkek (AKIpress) - Gold prices sank to their lowest level in 16 weeks as worries about political friction in Eastern Europe subsided and amid signs that the U.S. economy continues to recover from a winter slowdown, The Wall Street Journal said.
The most actively traded contract, gold for August delivery, fell $2.60, or 0.2%, to settle at $1,257.10 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the lowest settlement level since Feb. 4.
Gold has hovered around $1,300 for much of the past month, as the simmering conflict between Russia and Ukraine stoked investor appetite for the haven asset. Some investors believe gold holds its value better than other assets during geopolitical upheaval because it doesn't have links to governments or countries.
But investor interest the precious metal has been waning in the wake of the weekend presidential election in Ukraine, as hopes that the new leadership could help resolve the monthslong conflict between Moscow and Kiev curbed demand for gold.
Despite continued outbursts of violence in Eastern Ukraine, worries about the region are getting pushed to the back-burner, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago.
"Traders aren't looking at Ukraine as much as they were over the past month and a half," Mr. Haberkorn said.
Gold prices also faced pressure from upbeat U.S. economic data. U.S. jobless claims fell by 27,000 last week to a seasonally adjusted 300,000, beating forecasts of a decline to 319,000.
The report pointed to recovery in the U.S. labor market and revived speculation that the Federal Reserve will wind down its stimulus program before year-end, brokers said.
Gold had benefited from the Fed's efforts to spur growth, as many feared the program would also raise inflation and weaken the dollar. But fears that the Fed would end its stimulus efforts have been a burden for the gold market, leading prices to drop 28% in 2013 as many investors shed their bullion holdings in anticipation.