Manufacturing boosted hope for a recovering U.S. economy

Gold futures on the COMEX Division of the New York Mercantile Exchange extended the losing streak into a fourth session on Thursday, as lingering concerns about the European debt crisis continued to weigh on the markets.

The most active gold contract for February delivery dropped 9.7 dollars, or 0.6 percent, to 1,577.2 dollars per ounce.

A trader said gold received some support earlier in the session, after the euro rebounded from an 11-month low, while stocks and commodities bounced off the previous session’s slump, as better- than-expected data on jobless claims and New York area manufacturing boosted hope for a recovering U.S. economy.

But the precious metal failed to hold onto its earlier gains, after Christine Lagarde, the managing director of the International Monetary Fund, said that the European debt crisis is growing to the point that it won’t be solved by one group of countries, worsening concerns that Europe’s debt problem is further escalating.

If countries don’t work together, the world will face a situation similar to the 1930s, right before World War II, Lagarde added.

The news has sent investors into the U.S dollar as a currency “safe haven,” and the strengthening greenback helped add downward pressure on the gold price, as it makes the dollar-denominated gold more expensive to holders of other currencies.

Leave a Reply