Gold at 12-week low as Fed dampens risk appetite
U.S. dollar rallies against rivals; silver at lowest since Jan. 19
By Claudia Assis and Polya Lesova, MarketWatch
Last Update: 4/4/2012 02:42:44 PM
SAN FRANCISCO (MarketWatch) -- Gold futures on Wednesday sank to their lowest in
12 weeks, joining the selloff in stocks and other commodities after minutes from
the U.S. Federal Reserve's latest policy meeting undercut expectations for
further monetary stimulus.
Gold for June delivery (GCM2) declined $57.90, or 3.5%, to end at $1,614.10 an
ounce on the Comex division of the New York Mercantile Exchange. That was gold's
lowest settlement since Jan. 9.
Silver futures also posted sharp losses, with the May contract (SIK2) falling
$2.22, or 6.7%, to $31.04 an ounce. That was silver's lowest finish since Jan.
19.
"Dramatic selling in gold as good news for the economy became bad news (Tuesday)
as the FOMC dashed hopes of more easing," said in a note George Gero, a vice
president with RBC Wealth Management in New York.
After the steep losses and ahead of the long weekend, gold's next level of
support is $1,600 an ounce, said Charles Nedoss, a senior market strategist with
Olympus Futures in Chicago. Commodities and other markets will be closed Friday
in observance of Good Friday.
Minutes released from the Federal Reserve Tuesday signaled that central-bank
officials were less interested in another round of large-scale purchases of
bonds. Read more about the Fed minutes.
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Positive private-sector jobs data added to feelings more monetary easing is not
forthcoming.
Earlier Wednesday, Automatic Data Processing Inc. data showed the labor market
improving at a moderate pace, with private payrolls rising 209,000 in March.
The ADP report comes ahead of the Labor Department's report due Friday on
private- and public-sector positions
Meanwhile, the losses for metals came as U.S. equities traded sharply lower and
oil also sank. The Dow Jones Industrial Average (DJIA) recently dropped 148
points to 13,050. Read more on action in U.S. stocks.
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Oil futures declined 2.4%. Read Futures Movers.
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