Gold touches 2 week lows as investors lock in profits

17:09, May 22, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange undergone a massive correction on Friday and ended much lower, as investors locked in gains and dumped bullion to meet margin requirement of other investments. Silver ended a tad lower and platinum recovered.

The most active gold contract for June delivery dropped 12.5 U. S. dollars, or 1.1 percent, to finish at 1,176.1 dollars. The price has once hit 1,166.0 dollars per ounce earlier in the session, which is the lowest level since May 5.

Gold witnessed a major corrective and profit-taking pullback through the week, after it rallied to a record last week; it has closed lower for a fourth straight session Friday. Gold prices plunged by 4.5 percent or 56 dollars this week.

Gold nursed hefty losses before the start of the day session, and the lower price has helped gold to recoup some earlier losses in the mid-session by attracting investors who felt increasingly pessimistic about economic prospects of eurozone back to the market. But gold steeply fell prior to the close after the brief rally.

The speculation that European Central Bank would intervene in the market for the first time in 10 years, and the fact that EU finance ministers have vowed to exercise stricter sanctions to prevent mounting debts from increasing and keep a lid on the festering eurozone debt crisis and boost market confidence on European economy have pushed the euro to rebound from near 4-year lows against dollar Friday. The rally of euro has eroded the allure of gold as safe-haven.

July silver was down 6.4 cents, to settle at 17.651 dollars per ounce. July platinum climbed by 5.4 dollars, to close at 1,501.2 dollars an ounce.

Source: Xinhua


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