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Gold Falls Below 1,800 USD Mark After Central Bank Move
Sep 16,2011 08:58CST
industry news
Source:SMM
Gold futures on the COMEX Division of the New York Mercantile Exchange plunged on Thursday and closed below 1,800 dollar mark.

CHICAGO, Sept. 16 (Xinhua) -- Gold futures on the COMEX Division of the New York Mercantile Exchange plunged on Thursday and closed below 1,800 dollar mark, as the world's top central banks announced they will provide additional dollar loans to commercial banks, reducing demand for safe harbor assets.

The most active gold contract for Dec. delivery tumbled 45.1 dollars, or 2.5 percent, to 1,781.4 dollars per ounce.

The European Central Bank said on Thursday that it would lend euro zone banks dollars in three separate three-month loans to ensure they had sufficient funding until the end of the year.

"The Governing Council of the European Central Bank has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year," the ECB said in a statement.

The action, showing central bankers' determination to take aim at a key concern in the markets, caused stocks to rally and the U. S. dollar to fall, and also slowed the demand for safe-haven assets such as gold.

A trader mentioned that dollar liquidity measure will boost risk appetite in a short-term after fear had mounted recently that European banks were finding it increasingly difficult to tap sources of funding due to worries about their exposure to Greek debt.

Silver for Dec. delivery trimmed 1.032 dollars, or 2.5 percent, to 39.501 dollars per ounce.
 

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