Gold extends losses as investor risk appetite returns

08:34, June 04, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange continued to drop on Thursday, as positive U.S. economic data mitigated concerns that spreading eurozone debt crisis would slowdown the global economic recovery. Silver and platinum both retreated.

The most active gold contract for August delivery plunged 12.6 dollars, or 1.0 percent, to finish at 1,210.0 dollars.

The U.S. Labor Department said on Thursday that the initial claims for jobless benefits slipped for the second week, with a larger than expected decline, suggesting the U.S. labor market has been improving.

Meanwhile, the Institute for Supply Management said Thursday that its service index in May remained unchanged at 55.4, same as March and April, which means U.S. service sector expanded in May for a 5th straight month, as a level higher than 50 signals growth.

The upbeat data from U.S. labor market and service sector has calmed investor nerves and shored up market confidence by delivering the message that economic momentum in U.S might be strong enough to weather eurozone Debt Crisis. Gold retreated for the second day as investors who have regained their risk appetite sold off gold to take profits and speculated in stocks and other risky assets.

July silver was down 38.4 cents, or 2.1 percent, to settle at 17.931 dollars per ounce, July platinum dipped 7.5 dollar, or 0.5 percent to settle at 1542.9 dollars per ounce.



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