Investing.com - Gold futures continued their descent in the
early part of Friday's Asian session after touching lows not seen
since September of 2010 during Thursday's U.S. session.
On the Comex division of the New York Mercantile Exchange, gold
futures for August delivery slid 0.77% to USD1,276.25 per ounce in
Asian trading Friday after settling down 5.80% at USD1,294.35 a
troy ounce in U.S. trading on.
Gold futures were likely to find near-term support at USD1,271.80 a
troy ounce, the low from Sept. 21, 2010 and resistance at
USD1,391.35, Monday's high.
Gold and other precious metals were hit from a variety of angles
Thursday. Traders punished the yellow metal a day after Federal
Reserve Chairman Ben Bernanke said Wednesday that monetary stimulus
measures may taper this year and possibly end next year if the
economy improves, though the bottom fell out on
better-than-expected data out of the U.S. on Wednesday.
Stimulus programs such as the Fed's monthly USD85 billion
bond-buying program weaken the dollar to spur recovery, which makes
gold an attractive hedge.
That prompted some banks to forecast a possible to start to
tapering of QE3 as soon as late this year with the potential for
interest rate increases arriving as soon as early 2015.
Riskier assets were also rejected by traders after Thursday's spike
in China's Shanghai Interbank Offered Rate, or SHIBOR, that
country's equivalent of the London Interbank Offered Rate, or
LIBOR. That spike prompted an emergency $8.2 billion liquidity
injection into the banking system by the People's Bank of China,
news that roiled global financial markets with U.S. stocks enduring
their worst one-day performance in multiple years.
Elsewhere, Comex silver for July delivery dropped 1.02% to
USD19.620 per ounce while copper for July delivery rose 0.21% to
USD3.057 per ounce.
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