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updated: 5/28/2013 10:24 AM

Gold falls on speculation Fed may slow stimulus on U.S. growth

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Gold futures declined for a second session on speculation that the Federal Reserve may scale back monetary stimulus as the U.S. economy strengthens, curbing demand for the precious metal as a protection of wealth.

Confidence among U.S. consumers climbed in May to the highest level in more than five years, according to a New York- based private research group. In the 12 months through March, home prices rose by the most in seven years, a separate report showed. Holdings in global exchange-traded products backed by gold are set for a fifth straight monthly drop.

"Good U.S. data continues to weigh on gold," Thomas Capalbo, a precious-metals broker with Newedge Group, said in a telephone interview in New York. "Also, the withdrawals from ETFs show that the momentum buyers remain bearish."

Gold futures for August delivery slipped 0.5 percent to $1,380.80 an ounce at 11:02 a.m. on the Comex in New York, extending the month's loss to 6.2 percent. Prices fell 0.4 percent on May 24.

Trading was more than double the average in the past 100 days for this time of day, according to data compiled by Bloomberg. The Comex floor was shut yesterday for a national holiday, and yesterday's electronic transactions will be booked with today's trades for settlement purposes.

Fed Chairman Ben S. Bernanke said May 22 that the central bank may slow its $85 billion of monthly debt purchases if the economy shows sustained signs of improvement.

Silver futures for July delivery dropped 1.3 percent to $22.20 an ounce in New York.

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