Investing.com - Gold prices extended sharp losses from the previous session on Thursday, after plunging through key support levels as fears that euro zone’s sovereign debt crisis was worsening prompted investors to sell profitable gold holdings to raise cash.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,578.25 a troy ounce during early European morning trade, dropping 0.55%.
It earlier fell by as much as 0.75% to trade at USD1,567.05 a troy ounce, the lowest since September 26.
Gold futures were likely to find support at USD1,533.35 a troy ounce, the low of September 26 and resistance at USD1,645.65, the previous day’s high.
Gold prices plunged nearly 5% on Wednesday, dropping below the key support level of USD1,600 as lingering concerns over a possible mass downgrade in the euro zone sparked a rush to the U.S. dollar.
Ratings agency Fitch announced late Wednesday that it downgraded five European financial institutions, which included France’s third largest lender Credit Agricole.
For much of the last year, investors' typical reaction to downbeat news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal.
But that relationship has unraveled recently, with traders preferring the relative safety of the U.S. dollar instead.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, traded at 81.03, hovering just below Wednesday’s 11-month high of 81.41.
Gold futures have lost nearly 11% in the past two weeks, as investors sold the precious metal to raise cash and cover losses elsewhere. Despite the slump, gold prices are still 10% higher on the year, on track for its 11th consecutive annual gain.
European lender HSBC Holdings said earlier that, “Some macro hedge funds are liquidating gold holdings and taking profits in a difficult year. As trading volume typically drops toward year-end, we expect increasingly volatile price swings."
Elsewhere on the Comex, silver for March delivery edged 0.25% lower to trade at an 11-week low of USD28.87 a troy ounce, while copper for March delivery rose 0.3% to trade at USD3.287 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,578.25 a troy ounce during early European morning trade, dropping 0.55%.
It earlier fell by as much as 0.75% to trade at USD1,567.05 a troy ounce, the lowest since September 26.
Gold futures were likely to find support at USD1,533.35 a troy ounce, the low of September 26 and resistance at USD1,645.65, the previous day’s high.
Gold prices plunged nearly 5% on Wednesday, dropping below the key support level of USD1,600 as lingering concerns over a possible mass downgrade in the euro zone sparked a rush to the U.S. dollar.
Ratings agency Fitch announced late Wednesday that it downgraded five European financial institutions, which included France’s third largest lender Credit Agricole.
For much of the last year, investors' typical reaction to downbeat news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal.
But that relationship has unraveled recently, with traders preferring the relative safety of the U.S. dollar instead.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, traded at 81.03, hovering just below Wednesday’s 11-month high of 81.41.
Gold futures have lost nearly 11% in the past two weeks, as investors sold the precious metal to raise cash and cover losses elsewhere. Despite the slump, gold prices are still 10% higher on the year, on track for its 11th consecutive annual gain.
European lender HSBC Holdings said earlier that, “Some macro hedge funds are liquidating gold holdings and taking profits in a difficult year. As trading volume typically drops toward year-end, we expect increasingly volatile price swings."
Elsewhere on the Comex, silver for March delivery edged 0.25% lower to trade at an 11-week low of USD28.87 a troy ounce, while copper for March delivery rose 0.3% to trade at USD3.287 a pound.