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Forexpros – Gold futures traded sharply lower in U.S. trade Friday, falling below USD1,700 an ounce as investors rushed to raise cash in light of aggressive weekly sell-offs in global equities.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,662.35 a troy ounce during early U.S. trade, slumping 4.5%, after hitting a high of USDS1,755.55.
Gold’s decline continued from Thursday’s session, a day after the U.S. Federal Reserve announced its decision to launch a USD400 billion “Operation Twist”, a combination of buying and selling of short and long term Treasuries.
Dealers hoping for a liquidity boost from the Fed to ignite the faltering U.S. economy were largely unimpressed by the prospects that a bond swap would serve to provide the necessary spark.
Further downward momentum on safe-haven gold was provided by a statement issued from Washington where officials from the International Monetary Fund held meetings with finance representatives of the Group of 20 major economies.
The G-20 said it would be working in the next few weeks to expand the powers of the USD595 billion rescue fund to support troubled banks.
“We will ensure that banks are adequately capitalized and have sufficient access to funding to deal with current risks,” the statement said.
European shares notched modest gains by the close of Friday’s session. France’s CAC 40 rose 1.02% to 2,810.11, Britain’s FTSE 100 added 0.50% to 5,066.81, and Germany’s DAX was lifted 0.63% to end the session at 5,196.56.
On Wall Street traded mixed after early session losses, with the Dow Jones Industrial Average down 0.31% to 10,700.60, the Nasdaq Composite Index gained 0.39% to 2,465.28, and the S&P 500 inched up 0.09% at 1,130.55.
Silver was on track for its worst one-day drop since October of 2008 with silver for December delivery plummeting 12.06% to trade at USD32.4416 a troy ounce, while copper for December delivery sank 4.02% to trade at USD3.465 a pound.
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