Gold falls as dollar, improving US economy cut demand

LONDON, May 13 (Bloomberg): Gold declined in New York as signs of an improving US economy and a stronger dollar curbed demand for the metal as a protection of wealth.
The dollar climbed to one-month high versus the euro after a gauge of German investor confidence declined and before a report today forecast to show U.S. retail sales rose for a third month. Close to 70 per cent of U.S. economic indicators have outpaced analyst estimates as of May 9, the highest proportion since October 2009, according to a Westpac Banking Corp. gauge.
Gold slid 28 per cent last year on speculation the Federal Reserve would reduce stimulus as the economy recovers. The metal rose 7.4 per cent this year, partly as the Ukraine crisis spurred demand for a haven. Russia called disputed referendums in eastern Ukraine a sign of "deep crisis" in its neighbor as rebels there sought to secede and gas export monopoly OAO Gazprom gave Kiev a deadline to pay or risk being cut off.
"A positive U.S. macro scenario is, as ever, bearish for gold," Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. Bullion is "ever-so sensitive to the Fed's policy expectations and the U.S. dollar trade. The market will probably still keep an eye on developments in Ukraine."
Gold for June delivery fell 0.4 per cent to $1,290.70 an ounce by 7:46 a.m. on the Comex in New York. It touched $1,277.70 yesterday, the lowest since May 2. Futures volume was 11 per cent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Bullion for immediate delivery lost 0.4 per cent to $1,290.56 in London, according to Bloomberg generic pricing.