Gold continued to extend heavy losses today as the global equities surged on hopes that the latest boost of liquidity by the central bankers would help calm fears prevalent in the European sovereign debt markets. Five major global central banks have announced that they will provide dollar liquidity in a coordinated move to ease dollar-funding constraints among some European banks. Shares of French banks, which had been battered earlier in the week, jumped on the news soared, leading to a secular rally in world stocks yesterday and pulling Gold down in tandem. Safe haven demand waned and the NY floor session saw the gold futures tumbled sharply The European Central Bank, together with the US Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, will conduct three US dollar liquidity-providing operations with a maturity of approximately three months. There has been heavy concern that some European banks are encountering problems in getting access to dollar funds. The ECB's Governing Council has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year, the ECB said in a statement. The new dollar operations will be conducted in addition to the bank's current weekly dollar swaps, the ECB said Meanwhile, IMF's managing director Christine Lagarde stated today that she believed a sustainable recovery is still possible, though options narrowing. Gold quotes at $1765.60, down $13.60 per ounce, after dropping heavily for the last two days. Gold for December delivery shed $45.1 or 2.5%, to end at $1,781.4 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. MCX Gold has been in a downward spiral too, after breaching Rs 28500 earlier in the week, which was primarily because of a weak rupee. The MCX futures are quoting at Rs 27248, down Rs 222 on the day.

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