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Economy Recovers, Gold Goes Downhill

March 30, 2011 at 2:23 by Vladimir Vyun

Gold fell today as the global economic recovery reduces need for the precious metal a safer asset. Precious metals tend to rise in times of uncertainty and decline when economy looks good as other commodities become more profitable. The global economy these days look good enough to prefer risk over safety, even considering the problems in Japan.

The economy of the US adds to the evidences of the global economic recovery. The US gross domestic product showed strong growth in the fourth quarter of 2010. The personal income of the US citizens grew and the spending rose more than predicted in February. The positive fundamentals spur talks that the Federal Reserve will end its stimulating program and increase the interest rates.

June futures for gold delivery dropped $3.80 (0.3 percent) to $1,417.50 per ounce by 14:21 on COMEX. That’s was the fourth consecutive daily drop, the longest stretch of declines since January 7. The metal gained 28 percent from a year ago, but lost 0.3 percent this quarter.

If you have any questions and comments on the commodities today, use the form below to reply.

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