Global gold and silver prices dropped
sharply Thursday (Nov 6) as investors dumped the safe-haven metal amid strength
in the dollar and equities, with markets now fearing $1,000 an ounce as the
next target level.
Gold dropped to its lowest level in six
months while silver trading close to its lowest since February 2010 after
losing 4 per cent in the previous session.
Spot gold was firm at $1,143.20 an ounce.
It tumbled over 2 per cent to $1,137.40 on Wednesday, following a sharp
sell-off after breaking through key levels at $1,160 and $1,150.
The sell-off in gold began Oct 31, when
the metal broke through $1,180 - the lowest level gold had fallen to during
last year's 28 per cent plunge. Since then, the strength in the dollar and
breaks below key technical levels has built the case against gold.
Traders are keenly awaiting the US nonfarm
payrolls report on Nov 7, which they think could turn out to be another key
trigger for gold. A strong report could boost the dollar and dull bullion's
safe-haven appeal.
The yellow metal also took down other
precious metals along with it. Silver slid to 4-1/2 year lows of $15.13 an
ounce on Wednesday, while platinum and palladium fell to October lows.
The dollar rose to a four year high
against a basket of major currencies on Wednesday, after Republicans won
control over both chambers of the US Congress for the first time since 2006,
lifting investor expectations for more pro-business policies.
Weakness in the euro as investors
awaited the European Central Bank's policy meeting, and last week's surprise
move by the Bank of Japan to expand its stimulus measures have also provided a
boost to the greenback.
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