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Gold ends four-day lift | Updated: 6:55:34 PM, Wednesday April 24, 2013
Gold futures have ended lower after data showing an April deceleration in global factory activity snuffed out a four-day winning streak.
Gold for April delivery, the front-month contract, fell $US12.40, or 0.9 per cent, to settle at $US1,408.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
The most actively traded contract, for June delivery, fell $US12.40, or 0.9 per cent, to settle at $US1,408.80 a troy ounce.
Gold prices had rallied 4.4 per cent off 26-month lows set on April 15, rising for four straight trading days through Monday, as consumers in India and China rushed to buy gold jewellery and bullion bars and coins.
However, signs that global economic growth remains anaemic muted concerns about inflation and put a lid on gold’s rebound. Manufacturing in China and the US expanded at a slower pace, while Europe’s factory sector contracted.
‘Concerns about the euro-zone recovery and poor China manufacturing all help the unease felt by traders in general,’ said George Gero, a vice president and precious-metals strategist with RBC Capital Markets.
Investors have been worried that gold’s record-breaking two-day downdraft earlier this month could see prices continue to decline.
Gold prices rose about $US5 an ounce in early-afternoon trade, after a false tweet on the Associated Press’s Twitter feed reported explosions at the White House. The AP later said its Twitter feed had been hacked.
‘Hypothetically, if news like that was true, you’d believe that gold would move higher. If something like that were true, you’d expect a flight to safety,’ said Dave Meger, director of metals trading with Vision Financial. Gold is widely considered a haven from political and economic uncertainty.
Gold prices gave up the gains just as quickly, however.
‘It didn’t last long,’ RBC’s Gero said of gold’s uptick after the report.
Earlier in the day, gold prices also had pared losses after Goldman Sachs closed its recommendation to ‘short’ gold, telling clients to exit bets on lower gold prices.
Goldman Sachs has a large following among commodity investors as the bank has a reputation for making profitable calls on the market.
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