Gold dropped slightly from one-month high as optimism in markets following the European debt-relief accord and upbeat U.S. data damped safety demand. The market reacted positively to the agreement between European leaders to make private sector bondholders to bare 50% of losses of Greek debt to cut the Greek debt by 100 billion euros, while leveraging the firepower of the EFSF to 1 trillion euros from the current 440 billion euros. Other decisions of the summit included measures on bank recapitalization which will reach 106 billion euros, bigger role for the International Monetary Fund in addition to a commitment from Italy to do more effort to slash its huge budget deficit while the European Central Bank will maintain bond purchases. In addition, the cheerful U.S. data added to the positive sentiment as the U.S. economy grew 2.5%, the fastest pace in a year, from the second quarter's expansion of 1.3%. Also, initial jobless claims fell by 2,000 to 402,000 in the week ended October 22, showing improvement in the labor sector. The latest data from the U.S. is showing improvement. Yesterday, durable goods excluding transportation equipment soared 1.7%, higher than both revised and forecasted readings of -0.4% and 0.4%. Spot gold is traded around $172.00 an ounce, where the resistance at $1720 levels capped the metal's gains, pushing it down to a low $1706.10 after recording a high of $1729.34. The shiny metal will probably end the current month on a gain after recording the longest stretch of advance in more than 60 days. Crude oil for November delivery advanced to trade around $93.20 barrel compared with the day's starting level of $90.93. In the FOREX market, the U.S. dollar fell sharply to hover around 75.20 compared with the day's starting level of 76.18, according to the dollar index which tracks the greenback's movements versus six major currencies. |
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