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Gold drops as global growth concerns spark dollar demand

Published 10/09/2012, 09:02 PM
Updated 10/09/2012, 09:03 PM
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Investing.com - Gold prices fell in Asian trading on Wednesday after traders snapped up the precious metal's hedge, the dollar, amid a risk-off session marked by IMF cuts to global growth forecasts.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.09% at USD1,763.45 a troy ounce, up from a session low of USD1,762.75 and down from a high of USD1,765.75 a troy ounce.

Gold futures were likely to test support at USD1,762.15 a troy ounce, Tuesday's low, and resistance at USD1,781.55, Tuesday's high.

The International Monetary Fund said that the global economy will expand 3.3% this year and 3.6% in 2013.

Both forecasts represent downward revisions made in July for growth of 3.5% for this year and 3.9% in 2013.

The news cemented growing fears that the global economy is cooling, which sent investors snapping up safe-haven dollar positions.

Uncertainty elsewhere also kept investors in the safety of the dollar, which sent gold dipping.

Protestors clashed with police in Athens to mark German Chancellor Angela Merkel's visit to Greece, as the German leader urged Greece to stick with austerity measures, adding the country will be better off in the long run.

Uncertainty over whether Spain will seek a bailout kept the dollar up and gold down as well.

The dollar also saw gains against gold as investors braced for U.S. third-quarter earnings, which hit the wire beginning this week.

Elsewhere on the Comex, silver for December delivery was down 0.43% and trading at USD33.838 a troy ounce, while copper for December delivery was down 0.11% and trading at USD3.715 a pound.








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