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Gold futures drop $4.80 an ounce in Europe trading


By Virginia Harrison and Sara Sjolin, MarketWatch

LONDON (MarketWatch) — Gold futures dropped in electronic trading Wednesday, in a volatile session across the metals complex.

Gold for December delivery (CNS:GCZ2) fell $4.80, or 0.3%, to $1,664.90 an ounce on the Comex division of the New York Mercantile Exchange.

The metal closed lower in Tuesday’s North American session, breaking a strong recent runup in prices, as expectations of fresh stimulus measures from central banks in the U.S. and China ramped up demand for gold.


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Investors were awaiting guidance as to possible quantitative-easing measures by the Federal Reserve, including the timing of and size of any asset-purchase program, when U.S. Federal Reserve Chairman Ben Bernanke delivers a speech on Friday at the Kansas City Fed’s annual meeting in Jackson Hole, Wyo.

Gold is seen as a safe store of value and traditionally benefits amid expectations of monetary stimulus, as an alternative to devalued currencies.

A firmer dollar, however, pressured the metal. The ICE dollar index (NYE:DXY) , which measures the greenback against a basket of six rival currencies, rose to 81.498 from 81.334 in late North American trading Tuesday.

Dollar-denominated commodities tend to fall on a stronger dollar, as they get more expensive for holders of other currencies.

The trading day in Europe was also downbeat, with the Stoxx Europe 600 index (STX:XX:SXXP) off 0.4% to 266.37.

U.S. stock futures pointed to a lower open on Wall Street. Stock futures lower ahead of data, Fed Beige Book.

The broader metals complex traded lower.

Silver for September delivery (CNS:SIU2) fell 26 cents, or 0.8%, to $30.61 an ounce.

Platinum for October delivery (NYMEX:PLV2) lost $3.90, or 0.3%, to $1,516.50 an ounce, while palladium for September delivery (NMN:PAU2) declined $8.95, or 1.4%, to $630.75 an ounce.

September copper (CNS:HGU2) slipped 3 cents, or 1%, to $3.43 a pound.