Gold extends losses on selling pressure

13:45, June 25, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange extended losses on Friday, witnessing persistent selling pressure, as investors followed through with the previous session's liquidation.

The most active gold contract for August delivery pared 19.6 dollars, or 1.3 percent, to 1,500.9 dollars per ounce.

Some analysts mentioned that gold came under heavy profit- taking pressure, as a steep drop in equities and commodities markets prompted investors to raise cash to meet margin calls by selling safe-harbor assets such as gold.

Meanwhile, credit rating agency Moody's Investors Service warned 16 Italian banks they were on watch for a possible ratings downgrade.

Equities market suffered another major setback on Friday, on intensified worries about the Italian banking sector and Greece's austerity plan.

A trader mentioned that although gold is considered a safe- harbor from financial risks, sell-off usually forced speculators to sell bullion to cover equity losses, and a stronger dollar also added downward pressure on the precious metal.

Silver for July delivery dropped 36.4 cents, or 1 percent, to 34.638 dollars per ounce. Platinum for July delivery trimmed 16.9 dollars, or 1 percent, to 1,677.9 dollars per ounce.

Source: Xinhua
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