Gold started its decline after major central banks' coordinated to ease liquidity constraints on Thursday, which raised cautious hopes that policymakers would announce further action to help support the system. Yesterday's announcement has taken away some stress out of the market," said Walter de Wet, analyst at Standard Bank.
US banks have been reluctant to lend dollars to their counterparts in Europe because of the debt crisis. A shortage of dollars has meant frozen money markets, which if it continues could hit economic growth as most international trade is carried out in dollars.
But gold has rebounded nicely from its lows this morning, we've seen fairly decent buying out of Asia. Over the past couple of weeks whenever gold falls below USD 1,800, we've seen good buying, especially in Shanghai.
US banks have been reluctant to lend dollars to their counterparts in Europe because of the debt crisis. A shortage of dollars has meant frozen money markets, which if it continues could hit economic growth as most international trade is carried out in dollars.
But gold has rebounded nicely from its lows this morning, we've seen fairly decent buying out of Asia. Over the past couple of weeks whenever gold falls below USD 1,800, we've seen good buying, especially in Shanghai.
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