Gold extends loss on higher U.S. dollar
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E-mail Xinhua, May 23, 2012
Gold futures on the COMEX division of the New York Mercantile Exchange fell Tuesday, as higher dollar, growth concerns in Europe, and a credit downgrade in Japan all put pressure on the precious metal.
The most active gold contract for June delivery declined 12.1 dollars, or 0.76 percent, to settle at 1,576.6 dollars per ounce.
Gold extended its losses from Monday's session and fell to trade once again below the level of 1,580 dollars an ounce. The metal took the most pressure from a higher dollar, as a stronger greenback makes commodities in general more expensive for holders of other currencies, said market analyst.
Investors gravitated to the dollar Tuesday in response to continued uncertainty regarding European growth. The Organization for Economic Cooperation and Development revised down its forecast for euro zone growth, now estimating regional gross domestic product to shrink by 0.1 percent in 2012, and only grow 0.9 percent in 2013.
Also, Fitch Ratings downgraded Japan to a credit level of A+, citing its concerns on the country's high public debt levels.
Before gold has actually taken some momentum from economic worries such as the situation in Europe and Japan, the precious metal seems to have lost its traditional safe haven appeal as investors have increasingly preferred the dollar.
In the last few months, gold has largely been tracking with the direction of U.S. equities and crude oil, markets that were mixed on Tuesday. Silver for July delivery fell 14.2 cents, or 0.5 percent, to settle at 28.179 dollars per ounce. Platinum for July delivery fell 3.1 dollars, or 0.21 percent, to settle at 1,458.4 dollars per ounce.
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