Gold headed for its biggest weekly decline since February on investor concerns over a potential pullback in central bank stimulus amid signs the recovery is gathering pace.
Bullion extended a drop after tumbling 2% Thursday as the dollar and Treasury yields rose following better-than-expected U.S. data which added to speculation the Federal Reserve may bring forward the timeline for tapering bond purchases. Service providers expanded at the fastest pace on record last month, highlighting the ramp-up in business activity across the economy. American companies added the most jobs in May in nearly a year, according to the ADP Research Institute.
Still, New York Fed President John Williams said now is not the time for the U.S. central bank to adjust its bond-buying program, though it makes sense for the officials to be talking through options for the future. That follows comments from his Philadelphia counterpart,Patrick Harker, who said it’s appropriate to “slowly, carefully” move back on purchases at a suitable time.