[miningmx.com] — Gold slipped more than one percent on Friday, heading for its biggest weekly drop since March 2009, as stock markets gained and the euro rose after major central banks around the world strived to fight the debt
crisis in Europe.
US Treasury Secretary Timothy Geithner will discuss with European finance ministers the possibility of leveraging the euro zone’s bailout fund as the world’s main central banks aim to ease dollar funding for stricken banks.
Spot gold fell $21.45 an ounce to $1,767.19 during early morning trade after falling two percent in the previous session. Bullion struck a record around $1,920 last week on concerns the euro debt crisis could stall global growth.
“We favour maintaining our negative trading affair bias in today’s trade,” said Tom Pawlicki, precious metals and energy analyst at MF Global.
“Additional pressure will come from low expectations for quantitative easing at next week’s FOMC meeting, and from technical factors which argue for a move down to $1,700 to $1,750 an ounce in our opinion,” he added.
US gold futures fell $11.30 an ounce to $1,770.10 as investors looked to next week’s meeting of the Federal Reserve’s Federal Open Market Committee (FOMC) on interest rates.
The Fed, facing rising global financial strains and recession fears, is poised to increase downward pressure on longer-term interest rates next week in a bid to accelerate a sputtering US recovery.
Next week’s focus could also switch back to the dollar when the FOMC meets, with any hints policymakers are considering another round of quantitative easing likely to weigh on the currency.
