Thu, December 23, 2010
Business > Economy

Gold falls on yearend dumping

2010-12-23 02:00:01 GMT2010-12-23 10:00:01 (Beijing Time)  Xinhua English

CHICAGO, Dec. 22 (Xinhua) -- Gold futures on the COMEX Division of the New York Mercantile Exchange declined on Wednesday, as an increasing number of investors opted to cash in their holdings of gold, which has gained 27 percent so far this year, before yearend.

The most active gold contract for February delivery shed 1.4 dollars, or 0.1 percent, to close at 1,387.4 dollars per ounce.

Market traders noted that the gold market is due for a correction at the yearend as most investors would take profit from their gold holdings to improve the overall yield level. Gold has gained 27 percent so far this year, reaching a record high on Dec. 7.

Besides, the rally in the stock market also eroded the appeal of gold as an alternative investment, after the U.S. government on Wednesday adjusted upward the third-quarter GDP growth to 2.6 percent, slightly higher than the earlier estimate.

However, Wednesday's losses were limited by the speculation that Europe's sovereign-debt crisis will spread. Market worries over the European debt crisis intensified after Fitch Rating announced on Tuesday that it might downgrade the rating of Greece after a review in January next year.

Silver futures for March delivery also slipped 0.9 cents, or 0. 03 percent, to 29.385 dollars per ounce. In contrast, January platinum climbed nine dollars per ounce to 1,730.9.

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