Gold drops on strong US data

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as the U.S. Department of Commerce released a better-than-expected manufacturing report, while U.S. companies in the service sector expanded in July at the fastest pace in nine years.

The most active gold contract for December delivery fell 3.6 U. S. dollars, or 0.28 percent, to settle at 1,285.3 dollars per ounce.

The manufacturing report showed that factory orders climbed a seasonally adjusted 1.1 percent. This is the fourth gain in five months. The same report showed orders of durable goods rose 1.7 percent, also better than expected.

Meanwhile, economic activity in the U.S. service sector expanded in July at the fastest pace in more than eight years as new orders and hiring continued to advance, according to a widely recognized U.S. private survey.

Analysts note that gold has been under pressure because investors were worried that the Federal Reserve might raise interest rates sooner than expected amid an improving economy. They believe that unless there is growing serious political tension in any of the trouble spots in the world, there is no big chance that gold would rise.

Silver for September delivery lost 40 cents, or 1.98 percent, to close at 19.833 dollars per ounce. Platinum for October delivery shed 10.7 dollars, or 0.73 percent, to close at 1,455.9 dollars per ounce.