Gold futures continue to extend losses

On Thursday, after the Federal Reserve announced it may start scaling back its bond buying program by the end of the year, gold futures continued to extend losses and traded at the lowest level since September 2010.

On the New York Mercantile Exchange’s Comex division, gold futures for August delivery traded at 1,290.15 USD a troy ounce during European trading hours, down 6.1% on the day.

Comex gold prices dropped by as much as 6.3% earlier in the session and hit a daily low of 1,287.25 USD a troy ounce, the lowest level since September 28, 2010.

Gold futures were expected to find near-term support at 1,277.10 USD a troy ounce, September 28th 2010’s low, and resistance at 1,365.20 USD, the high from May 19th.

Fed Chairman Ben Bernanke announced the bank may begin slowing asset purchases by the end of 2013 and end them completely by the middle of 2014 if the economy improves as the central bank expects.

The bank reported it expects the US economy to rise between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to drop to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.

Silver for July delivery dropped 8.3% and traded at 19.83 USD troy ounce, the lowest level since September 2010, while copper for July delivery dropped 2.2% to trade at a seven-week low of 3.070 USD a pound. Copper prices were subject to heavy selling pressure after the release of weak Chinese manufacturing data.

Data released on Thursday showed that China’s HSBC preliminary manufacturing purchasing managers’ index dropped to a nine-month low of 48.3 in June from 49.2 in May as new orders decreased, which indicates that the slowdown in manufacturing is worsening.

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