Futures Market News
Gold futures fell almost $40
Jul 02, 2010 08:47 AM
Gold futures fell sharply Thursday to settle at $1,206.70 per ounce on the Comex in New York, reflecting a general flight to the perceived safety of the dollar and dollar assets. Investors appeared to favor Treasury notes and safe bonds, registering their fear that deflation is a greater threat than inflation.
The Spanish Treasury sold $4.28 billion of five-year government bonds, defying warnings by Moody's Investors Service that the rating agency might cut Spain's AAA sovereign debt rating. The yield on the five-year debt rose 12.5 basis points to 3.657 percent.
Stock indexes and futures also had a depressing day, but gold failed to pull in the opposite direction, as it has done in many sessions this year. Sovereign debt didn't appear to worry investors as much as weak growth in China and increasing jobless claims in the U.S.
Another factor in the dropping price of gold was the International Monetary Fund's sale of 15.2 metric tons of gold last month, after selling 14.4 tons in April and 18.5 in March.
Silver futures also fell 4.9 percent to settle at $17.79 per ounce.
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