Gold prices dropped on Monday as confidence in liquidation efforts in the U.S. and Euro reduced the need for the hedge investment. December gold moved to $842.50, down $16.50 on the session. The precious metal fell as low as $829.00 in electronic trading as it added to Friday's slump.
The U. S. Federal Reserve along with the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank promised to inject unlimited amounts of cash to unfreeze credit. On Monday, Germany announced the details of a rescue package that could be worth as much as €500 billion. Meanwhile, France unveiled details of its plan to guarantee interbank loans of up to €320 billion.
The U.S. dollar was little changed versus the euro after slipping away from a yearly high of 1.3256 reached on Friday. Versus the sterling, the dollar pulled back from Friday' 4-year high of 1.6770. The dollar also weakened versus the loonie, but gained on the Japanese yen.
Over the weekend, Group of Seven finance ministers signed a one-page statement pledging to work together to stabilize markets. There were no specific proposals included in the statement, but the G7 expressed support for plans to partially nationalize a number of banks in the UK and US.
Gold climbed to its highest level in more than two months last week as the ongoing financial turmoil led to the worst week in the 112 year history of the Dow, which touched below 8,000 on Friday. Gold hit as high as $936.30, the precious metal's highest intraday mark since July 28. The metal then turned sharply lower on Friday afternoon and closed down $27.50.
by RTT Staff Writer
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