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Gold drops on strong greenback, euro zone woes

Published 06/01/2012, 07:46 AM
Updated 06/01/2012, 07:48 AM
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Gold futures were lower in European trade Friday as weak euro zone economic figures combined with a stronger greenback to dampen enthusiasm for the precious yellow metal.

On the Comex division of the New York Mercantile Exchange, Gold futures for August delivery traded at USD1553.85 a troy ounce dropping 0.70%.

It earlier traded at a session low USD1549.25 a troy ounce. Gold was likely to find support at USD1532.55 and resistance at USD1585.65.

Traders are anticipating the nonfarm payroll report to indicate increased hiring in the U.S. with a 150,000 worker gain, lifting the U.S. dollar thus depressing dollar denominated commodities.

China’s manufacturing Purchasing Managers index fell to 50.4 in May from 53.3 in April increasing fears of a global slowdown.

Another report indicated that unemployment in the euro zone reached 11% in April and March, the highest since the data started in 1995.

The European Central Bank and Italy pushed Germany to relent its opposition to direct euro zone aid to struggling banks in an effort to end the crisis.

Meanwhile, yields on German two, five and 30 year bonds plunged to record lows today, as well as on 10 year treasuries and British gilts

US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.24% to trade at USD83.39.

Elsewhere on the Comex, Silver for July delivery fell 1.59% to trade at USD27.315 a troy ounce while Copper for July delivery fell 1.19% to trade at USD3.325 a pound.




 

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