World Business

Gold dips below $1,200 per ounce on rekindled risk appetite

(Xinhua)
Updated: 2010-07-07 15:25

CHICAGO - Gold futures on the COMEX Division of the New York Mercantile Exchange ended much lower on Tuesday, as the sharp rally in equity markets and euro deflated safe-haven demand. Silver and platinum both advanced.

The most active gold contract for August delivery dropped 12.6 dollars, or 1.0 percent, to finish at $1,195.1, after touching $1,189.50, the lowest price since May 24.

Related readings:  China committed to US Treasuries, tepid on gold  China's gold output up 6% in Jan-May

The Institute for Supply Management said on Tuesday that its services index fell to 53.8 from 55.4 in May, which is lower than economist's pervious forecast of 55.0, and suggested that the service sector grew more slowly last month. But it seemed that investors have shrugged off the lackluster report, as?US equity market bounced off in the early trading and recovered most of its major losses in the last two weeks following a series of downbeat economic reports. The big bounce in equity markets has ignited investors' risk appetite and eroded safe-haven demand for the precious metal.

Meanwhile, euro rebounded against dollar on Tuesday, indicating that the concern over eurozone sovereign- debt crisis is abating, and further tamped down investors' safe haven sentiment which had offered solid support to bullions in the last two month.

September silver climbed 13.8 cents, or 0.8 percent, to settle at $17.857? per ounce, October platinum rose $15.1, or 1.0 percent, to settle at $1518.7 per ounce.