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Gold drops after IMF cuts global growth forecast, dollar gains

Published 04/17/2013, 02:27 PM
Updated 04/17/2013, 02:27 PM

Investing.com - Gold prices dropped on Wednesday after the International Monetary Fund cut its global growth forecast for this year, which sent investors chasing safe-haven positions in the dollar, which tends to trade inversely from the yellow metal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.81% at USD1,376.15 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,365.25 and down from a high of USD1,395.05 a troy ounce.

Gold futures were likely to test support USD1,322.25 a troy ounce, Tuesday's low, and resistance at USD1,494.95, Monday's high.

The IMF earlier said it trimmed its 2013 world economic growth forecast to 3.3%, down from a January projection of 3.5%, while the multilateral lending institution's 2014 growth forecast fell to 4.0% from 4.1%.

The news sent investors flocking safe-haven currencies such as the dollar, which are popular venues to ride out uncertainty.

Talk of physical buying out of Asia curbed gold's losses.

Gold prices have plunged in recent session due to disappointing economic data, talk of an end to the Federal Reserve's stimulus measures that weaken the dollar to fuel growth, and on sentiments that after a 12-year bull run, the asset may be due for a breather.

Elsewhere on the Comex, silver for May delivery was down 1.56% at USD23.260 a troy ounce, while copper for May delivery was down 3.63% and trading at USD3.186 a pound.







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