Gold tumbles as SEC sues Goldman, dollar surges

08:58, April 19, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange closed much lower on Friday, as the news that SEC charged Goldman Sachs with fraud fueled dollar rally. Sliver and platinum both dropped sharply.

The most active gold contract for June delivery plunged 23.4 U. S. dollars, or 2 percent, to finish at 1,136.9 dollars.

The government has accused Goldman Sachs & Co., a major player in commodities markets, of defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages.

The commodities market sentiment was severely hit by the news, and led unnerved investors cut back on riskier investment and come back to safe-harbor assets like dollar. The strong dollar has been the primary catalyst for the sell-off in gold.

Oil prices fell to below 83 dollars a barrel on Friday, pressured by the rallied dollar and Goldman news. The decline in oil price eroded gold's appeal of safe-haven as investor usually purchases gold as a hedge against oil-led inflation.

Meanwhile, U.S. consumer sentiment index dropped surprisingly in early April, suggesting a slip in economic expectation, according to a report released on Friday, which has a negative impact on investor risk appetite as consumer sentiment is usually considered a proxy for consumer spending, which accounts for about two-thirds of the U.S. economy. Waning Investor Appetite for Risk also placed downward pressure on gold price.

May silver dropped 75.8 cents to 17.675 dollars per ounce. July platinum was down 31.0 dollars to 1,695.3 dollars an ounce.

Source:Xinhua

(Editor:黄蓓蓓)

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