Commodities slide on weak US factory output data, gold hits one-month low
Gold hit a nearly one-month low on technical selling after the price broke through key support levels despite easing measures by the Australian central bank. Copper tumbled from last session's six-week high and brent crude edged down although concerns linger about potential supply disruptions due to the West Asian conflict.
The US factory output slumped to its lowest since July 2009 in November on uncertainties over the US budget negotiations and in the aftermath of last month's Hurricane Sandy, the Institute for Supply Management said late Monday.
The data blunted optimism about a meaningful recovery in the global economic growth after different sets of figures, released earlier on Monday, suggested Chinese manufacturing was turning the corner and the world's second-largest economy would likely post expansion after seven straight quarters of slowdown.
Although US lawmakers have been engaged in talks to avoid a so-called fiscal cliff — a $600 billion package of reduction in spending and tax hikes that would kick in early 2013 which, analysts believe, may potentially drive the largest economy back into recession— a solution is still elusive.
Gold pared down below $1,710 an ounce and subsequently $1,705, key technical levels it had held since early November, which triggered stop-loss selling, Reuters quoted traders as saying. However, they said with the price dipping, bargain hunters
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