Gold drops as U.S consumer confidence rebounds

08:52, March 31, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange ended lower on Tuesday, as Consumer confidence index and housing data released on Tuesday signaled a sustainable economic recovery. Sliver and platinum both dropped.

The most active gold contract for June delivery dropped 5.8 U.S. dollars, or 0.5 percent, to finish at 1,105.7 dollars.

The Conference Board said on Tuesday that the Consumer Confidence Index rose to 52.5 in March, exceeding previous forecast.

Due to the fact that many factors had impact on consumer confidence in March, such as harsh weather that shut business and hindered job-hunting, as well as concern over Greece's debt crisis, March's positive confidence report gave investor hope that the economic recovery will be sustained.

The S&P/Case-Shiller 20-city index showed that home prices inched higher in January for an eighth month, suggesting the housing market is stabilizing while the economy expands.

The optimistic economic data made investors feel confident about the economic prospects, reducing gold's demand of safe-haven.

Meanwhile, euro remained vulnerable amid concerns about the fiscal crisis of Greece. The stronger dollar also made gold less attractive as a hedge.

May silver was down 5.7 cents to 17.33 dollars per ounce. July platinum declined 5.4 dollars to 1,626.1 dollars an ounce.

Source: Xinhua
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