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Gold prices fell sharply, while continuing its yesterday's drop, as the appeal of gold as an alternative investment disappeared after the stock markets rose on prospects for sustainable stimulation of the central bank stimulus, while stocks in the stock funds fell to its lowest level in more than three years.
Metal came under pressure as the United Kingdom and Japan have returned from a long weekend, and immediately drew attention to yesterday's comments head of the European Central Bank (ECB), Mario Draghi, who confirmed that the bank is ready to cut rates again if need be. Meanwhile, on the dynamics of trade influenced the decision of the Central Bank of Australia cut rates to a record low - 2.75%, and the statement that the RBA may make one more drop. Note that the decline in interest rates usually is good for gold, as they stimulate investors to invest in non-interest-bearing assets such as precious metals, but cyclical assets, including stocks appear more attractive at the moment, analysts said.
In addition, the data showed that stocks in the SPDR Gold Trust fell yesterday by 0.3% to 1,062.30 tons, while reaching its lowest level since August 2009.
The cost of the June gold futures on COMEX today dropped to 1446.80 dollars an ounce.
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