Silvermex Resources (GGCRF)

[the cork]

Silver 31.34, Gold 1617.60, Falls 3%, Silver Down 4.7%
Apr 04, 2012 By Tatyana Shumsky Of DOW JONES NEWSWIRES

--Comex June gold down 2.9% at $1,623.30/oz
--Gold slides lower as disappointment over lack of QE continues
--India, China remain on sidelines

NEW YORK (Dow Jones)--Gold futures sank 3% Wednesday on ongoing disappointment over the Federal Reserve's apathy toward further stimulus and as physical demand in Asia remains lackluster.

The most actively traded contract, for June delivery, was recently down $48.70, or 2.9%, at $1,623.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

The Federal Open Market Committee didn't hint at an imminent round of quantitative easing in the minutes of its last meeting, released Tuesday afternoon. But the Fed's policy setting arm said interest rates would need to be kept low for an extended period to keep the economic recovery on track.

"The impact of the Fed minutes on gold, which was already trading lower heading into the news, was swift and brutal," said Edward Meir, senior commodity analyst with INTL FCStone, in a note.

Gold prices slumped on the release and continued to erode overnight amid trader disappointment.

Gold has benefited from previous monetary stimulus measures, which sparked worries about inflation and weakness in the dollar. At the time, investors flocked to gold, which is widely considered a hedge against inflation, a store of value and an alternative to paper currencies.

But with no such easy money boost on the radar from the Fed, traders who had bet on further stimulus pared their gold holdings.

Gold's downward spiral was exacerbated by national holiday celebrations in China, which kept buyers there out of the market. China is the world's second-largest consumer of gold, but market participants there have been on the sidelines since Monday. Chinese traders are due to return to the precious metal market Thursday.

Meanwhile, jewelry store owners in certain states in India are also on the sidelines as they continue to protest the government's gold tax hikes. India's gold imports fell by around two-third in March as a result of the protests.

A stronger dollar also weighed on gold prices. The greenback rallied against the euro, with the single European currency recently changing hands at $1.3127, down from $1.3233.

Gold futures are priced in dollars and seem more expensive to investors using foreign currencies when the dollar strengthens.

Silver prices followed gold's cues, with futures for May delivery tumbling $1.545, or 4.6%, at $31.720 a troy ounce.

-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; [e-mail]
(END) Dow Jones Newswires
04-04-12 1013ET

http://news.tradingcharts.com/futures/6/2/176442026.html