Gold hits 2-week low as stock market tumbles

08:50, May 21, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange extended losses on Thursday after a volatile session, mirroring a similar trend in the U.S. equity market, as mounting threats which may stifle global economic growth unnerved investors. Silver and platinum continued to plunge.

The most active gold contract for June delivery dropped 4.5 U.S. dollars, or 0.4 percent, to finish at 1,193.1 dollars an ounce.

Germany's move to ban short sales of some securities and government bonds late Tuesday fueled fears that other European nations may adopt stricter regulation of financial markets, and continued to drag down the U.S. equity and commodities market on Thursday. The euro, which was considered as a major indicator of confidence in European economy, fell again on Thursday against other major currencies.

Gold retreated with other assets, once hitting 1,175.0 dollars per ounce, the lowest level for a most-active contract in two weeks, driven by profit-taking as well as selling pressures from other markets, as some investors dumped bullion to cover losses elsewhere.

The U.S. labor Department said on Thursday that the number of people applying for the first time unemployment benefits rose by 25,000 to 471,000 in the week ended on May 15, compared with economists' previous expectation of a slight drop to 440,000. The disappointing result has worsened investors' concern over U.S and global economic recovery, and helped gold regain some lost ground.

July silver tumbled 40.0 cents, or 2.2 percent, to settle at 17. 715 dollars per ounce. July platinum crashed by 109.9 dollars, or 6.8 percent, to close at 1,495.8 dollars an ounce.



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