The benchmark COMEX Gold contract on NYMEX declined 1.9% in the week to close at $ 1590.1 per troy ounce, compared to $ 1620.5 per troy ounce at the beginning of the week. The moves throughout the week were choppy with Gold reaching $ 1640 per ounce on 6 June 2012 before decline. As soon as the expectations from the Federal Reserve shattered with no promises on stimulus the yellow metal suffered sharp derailment.
The tensions in European Union continued. Spain managed to sell its 2.1 billion Euro bonds as bond yield fell to 6.18% but soon met with decline in ratings. FITCH rating agency downgraded long term foreign and local currency default ratings to BBB from A. Spain is likely to ask for stimulus from European nations to save their troubled banks. Exports of Germany declined by 1.7% in April its first since December 2011.
Nervousness got injected in Gold after the cut from Chinese Premier Bank, PBoC in lending and deposit rates increased fears that the economy was in shambles. Peoples Bank of China decreased the benchmark rates by 0.25%. One year loan rate was reduced to 6.31% while one year deposit rate was lowered to 3.25%. SPDR Gold ETF holdings stood at 1274.79 tonnes.
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