Web Sify
Follow us on
Mail
Print

Gold hits three-year low, soothing c.bank talk steadies world stocks

Source : REUTERS
Last Updated: Wed, Jun 26, 2013 08:29 hrs
Gold<br>

Gold slumped to a near three-year low on Wednesday as healthy U.S. data supported the Federal Reserve's plan to cut back its stimulus, while reassurance that Europe was not about to follow suit bolstered the region's stocks and government bonds.

Gold, typically seen as a hedge against the kind of inflation central bank money printing can lead to, fell 2.3 percent and silver dropped 4 percent to leave both at their lowest levels since September 2010.

The falls came after data on Tuesday showed U.S. consumer confidence jumped in June to its highest level in more than five years, supporting the view that the Fed will press ahead with its plans to reduce its support programme.



After a choppy start, top European shares had settled up 0.2 percent and euro zone government bond prices were also mostly higher, as soothing words from Europe's top central bankers, helped sentiment.

"If the data remains strong then maybe it's (Fed stimulus pullback) going to happen but I don't think we are in any way close to stimulus withdrawal in places like Europe or the UK at the moment," said one bond market trader.

In the currency market, the dollar turned lower against the yen after its recent strong run while the euro was little changed at $1.3073 following this week's dip against the greenback.

In Asia, most of the region's shares had turned around a four-day losing streak as assurances from China's central bank that it will offer funds to banks if needed also helped steady recent nerves.

More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify finance