Gold falls on strong US GDP data

CHICAGO, July 31 (Xinhua): Gold futures on the COMEX division of the New York Mercantile Exchange fell yesterday as investors speculated that strong US GDP data gave the US  Federal Reserve backing to tighten its monetary policy earlier than expected.
The most active gold contract for December delivery fell 3.6 U. S. dollars, or 0.28 per cent, to settle at 1,296.9 dollars per ounce.
The US economy grew at an annual rate of 4.0 per cent in the second quarter after unexpectedly shrinking in the first three months this year, the US Commerce Department announced earlier Wednesday. That confirmed the Fed's view that the world's largest economy would strongly bounce back after the severe winter weather ended.
As widely expected, the US central bank on Wednesday cut its monthly asset purchases to 25 billion US dollars from 35 billion dollars, leaving it on track to end the program later this year. Although the Fed maintained a dovish tone by saying that it would keep interest rates low for a "considerable time" after ending purchases, some analysts believe if the economy remains strong in coming months, the Fed will likely move forward its first rate increase to the first half of next year.