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Gold nose dives as investors chase dollars ahead of G7 meet

Published May 10, 2013 12:34PM ET
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Investing.com - Gold prices took a nosedive in U.S. trading on Friday as investors snapped up dollar positions ahead of a Group of Seven meeting of finance ministers and central bankers taking place in the U.K. this weekend.

Uncertainty over policy stances on stimulus tools, which weaken paper currencies to spur recovery, bolstered the dollar's safe-haven appeal.

Gold and the dollar traditionally trade inversely from one another.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 2.39% at USD1,433.45 a troy ounce in U.S. trading on Friday, up from a session low of USD1,418.65 and down from a high of USD1,461.15 a troy ounce.

Gold futures were likely to test support USD1,403.55 a troy ounce, the low from April 22, and resistance at USD1,475.55, Wednesday's high.

A surging dollar sent gold falling, especially on uncertainty as to when the Federal Reserve will wind down stimulus programs.

The Fed is currently running a USD85 billion monthly asset-purchasing program, which weakens the greenback to spur recovery.
 
Better-than-expected jobless claims released on Thursday also bolstered the dollar's appeal.

The Department of Labor reported Thursday that the number of individuals filing for initial jobless claims in the U.S. last week fell by 4,000 to 323,000, defying expectations for an increase of 8,000 to 335,000.

Last week, the Bureau of Labor Statistics reported that U.S. economy added 165,000 nonfarm payrolls in April, up from 138,000 in March, whose figure was revised up from 88,000.

April's figures far outpaced analysts' forecasts for a 145,000 figure.

Technical factors drove the selloff as well.

Elsewhere on the Comex, silver for July delivery was down 1.16% at USD23.633 a troy ounce, while copper for July delivery was up 0.40% and trading at USD3.354 a pound.










Gold nose dives as investors chase dollars ahead of G7 meet
 

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