Date: Friday 02 Jul 2010
Gold was swept up in a broad market sell-off on Thursday that saw the yellow metal fall the most in a single day for five months.The August futures contract sank $39.20, or 3.2%, to $1,206.70 an ounce in New York in pretty thin trade. It hadn’t fallen that much in a session since a slump of over 4% early February.
With investors growing increasingly nervous ahead of the long Independence Day weekend, they switched safe havens from gold to US Treasuries.
The market was deluged with grim news on the economy.
The Institute for Supply Management’s manufacturing index fell from 59.7 in May to 56.2 last month, the lowest number since October.
Initial jobless claims rose to 472,000 last week, according to the Labor Department. Economists had wanted a drop to 452,000. That figure wasn’t welcome ahead of Friday’s non-farm payroll number.
Meanwhile, the removal of the homebuyer tax credit led to a 30% slump in sales of existing homes in the US. The National Association of Realtors says its Pending Home Sales Index fell from 110.9 in April to 77.6 in May. A fall was expected but not one that sharp.
Elsewhere, silver fell almost 5%, its biggest single-day loss since May.
On the oil markets, August crude fell for the fourth day in a row as the economic news kept demand fears bubbling.It fell $2.68, or 3.5%, to $72.95 a barrel and analysts aren’t confident going forward. Demand is weak and supply is high, they say.
Manufacturing data out of China has already indicated a slowdown in growth in recent months.
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