Gold drops on China

Gold fell in choppy trade on Monday as a reduced target for Chinese economic growth pressured commodities and equities, and the metal's losses could accelerate if it fails to hold key support after last week's sell-off.

Bullion fell 1 percent earlier after China cut its 2012 growth target to an eight-year low of 7.5 percent from 8 percent. The country, viewed by many as the world's economic engine, kept its inflation target unchanged at 4 percent.

Gold recovered somewhat on a slightly weaker dollar, but investors remained cautious toward the metal after last week's sudden, 3.5 percent drop.

"The bears will score a major victory if they are able to send prices below the longer-term 200-day moving average. Until then, one can expect sideways action to ensue," said Adam Sarhan, CEO of Sarhan Capital.

Read Full Article from Reuters

- Posted: 2012-03-05 12:42:59

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