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Gold futures pare losses after mixed U.S. data, silver tumbles

Published 05/12/2011, 10:24 AM
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Investing.com – Gold futures pared losses on Thursday, after a flurry of U.S. government data painted a mixed picture of the U.S. economic recovery, while silver prices extended sharp losses to hit a three-month low.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,495.35 a troy ounce during U.S. morning trade, shedding 0.43%.  

It earlier fell as much as 1.6% to USD1,477.95 a troy ounce, the lowest price since May 6.

Earlier in the day, official data showed that U.S. retail sales posted their smallest gain in nine months in April, as higher food and fuel costs diverted spending from other areas.

In a separate report, official data showed that U.S. producer price inflation rose more-than-expected in April.

Also Thursday, the Department of Labor said U.S. claims for unemployment benefits fell sharply last week after a surprisingly big rise the previous week.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.11% to hit 75.61, hovering close to a three-week high as fears over Greece's debt crisis weighed on the euro.

Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.

Elsewhere, silver for July delivery plunged 5.25% to trade at USD33.35 a troy ounce during U.S. morning trade, after earlier dropping by as much as 7.5% to USD32.31, the lowest price since February 25. 

“Despite the price slump already, we still see further correction potential for silver, though its downward course is unlikely to be a one-way street,” Commerzbank said in a report earlier Thursday.

Silver prices have lost approximately 32.5% since hitting a 31-year high of USD49.81 on April 25.

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