PRC: Gold and silver battered as US housing perks up
Gold took another beating on more signs that the US economy is picking up momentum.
Spot gold slumped by more than US$20 to US$1,647.6 as the revised third quarter US GDP figures came in at a much better than expected 3.1%, against best predictions of 2.9%.
The upward revision was followed by good data on US existing house sales, with activity at its best for three years in November, and a higher than expected read from the Philly Fed manufacturing index.
Gold has stalled in recent weeks following the burst toward US$1,800 when the US Federal Reserve unleashed its third round of quantitative easing.
The Federal Reserve has tied its QE programme to the creation of new jobs in the US and if the economy recovers rapidly, traders fear QE may end sooner than expected while gold may lose appeal as a haven.
The gold price tumbled on Monday on reports of a major fund selling and chartists say today’s fall takes it through a major resistance point.
A stalling in the talks over a solution to the US fiscal cliff issue added to the uneasy mood, while traders closing positions ahead of the Christmas holiday may also have hit sentiment.
Silver fell sharply, dipping below US$30 at US$29.8 as the profit taking hit all precious metals. Platinum shed US$33 to US$1,553.
