Gold Futures Plunge In Reaction to Stronger Greenback
Gold futures declined on Thursday in reaction to stronger US dollar. Investors were also uncertain over China’s disappointing manufacturing sentiment index and effectiveness of US Federal Reserve decision for bond swap program over the economy.
Gold futures contract for December delivery declined 3.7 percent or $66.40 to $1,741.70 per ounce on the Comes trading of New York Mercantile Exchange. The respective contract reached its day’s low of $1,723.20 per ounce.
Head trader and strategist, Matt Zeman from Kingsview Financial in Chicago commented, “You’ve got liquidation, people are going into cash and Treasurys, fear is dictating the gold market.â€
Gold is inversely proportional to US dollar which was much stronger as the dollar index DXY which measures the performance of greenback against its major counterpart currencies gained to 78.549 on Thursday as compared to 77.089 on Wednesday’s North American trading session.
ETF and mutual funds backed on base metals also closed on negative note as Freeport-McMoRan Copper & Gold Inc fell 11 percent while SPDR Gold Trust dropped 2.6 percent. iShares Silver Trust also plunged 8.7 percent on Thursday.
Among other metals silver futures contract for December delivery fell 9.6 percent or $3.89 to $36.58 per ounce which also happens to be its lowest since the month of July. Copper future contract for December delivery declined 7.3 percent or $0.28 to $3.49 per pound.
Platinum futures contract for October delivery slipped 4.3 percent or $77.60 to $1,710.60 per ounce while palladium futures contract for December delivery declined 6.9 percent or $48.80 to $664.05 per ounce.
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