Xinhua: Gold Settles at Lowest in Over 9 Months

Gold futures on the COMEX division of the New York Mercantile Exchange dropped Wednesday to the lowest level since late June, hit by weakness in demand for so-called paper forms of the metal, such as exchange-traded funds (ETF).

The most active gold contract for June delivery fell 22.4 dollars, or 1.42 percent, to settle at 1,553.5 dollars per ounce.

That was the lowest settlement for a most-active contract since June 28, according to FactSet data. Market analysts said the selling in the largest gold-backed exchange-traded fund has created a scenario of liquidation in the gold market, putting pressure on price of gold and counterbalancing its physical demand.

Holdings of gold in the ETF fell to 38.9 million ounces Tuesday, down from 39.1 million on Monday. They were at 43.4 million ounces on Jan. 2. The losses for gold futures came as shares of the SPDR Gold Trust fell 1.5 percent in afternoon dealings. They're down over 7 percent year to date, reports say.

On Wednesday, U.S. dollar weakened against most of its currency rivals, including the euro. Weakness in the dollar usually provides support for dollar-denominated commodities such as gold. That apparently wasn't enough to support gold against the session' s price pressures.

Given that backdrop, silver for May delivery lost 45.1 cents, or 1.66 percent, to close at 26.797 dollars per ounce.

From: Xinhua
Time: 2013-04-04