Gold Futures Fall in Move That Surprises Analysts

Gold futures prices fell sharply Friday, surprising analysts and extending the metal’s decline over four days on New York’s Commodity Exchange to more than $9 an ounce.

On other markets, pork belly futures plunged while livestock futures were mixed; soybeans advanced while grains were mixed; energy futures were mostly lower, and stock index futures advanced.

Metals analysts said the stronger dollar may have had some negative impact on precious metals markets but not enough to fully explain the plunge in gold futures, which lost as much as $6.10 an ounce during the session.

“I wasn’t expecting a selloff today of this sort of magnitude,” said Richard Levine, vice president of the metals and foreign exchange group at Elders Futures Inc. in New York.

Analyst Craig Sloane of Smith Barney, Harris Upham & Co. said a government report showing virtually no change last month in factory orders for durable goods was somewhat disappointing, but also was hardly enough to spark Friday’s decline in metals.

“There’s been no real negative news,” he said. “I guess there’s just been nothing exciting going on and the market has sold off and just kind of fed on itself for awhile.”

Another analyst, Bernard Savakl of Paine Webber Inc., linked the selloff to talk of Japanese sales of platinum and government concern over Taiwanese purchases of gold.

Pork Bellies Plunge

Gold settled $4.50 to $6.10 lower, with the contract for delivery in June at $452.40 an ounce; silver was 4.5 cents to 5.3 cents lower, with May at $6.415 an ounce.

Pork belly futures plunged as much as 1.32 cents a pound on the Chicago Mercantile Exchange on expectations that a monthly government report issued after the close would show a large increase in the number of bellies in cold storage. The assumption was correct.

The Agriculture Department counted about 90.5 million pounds of frozen pork bellies at the end of March.