Gold for December delivery fell USD 10.20 to finish at USD 1,612.60 per ounce. That's about USD 10 less than it was on June 1 and nearly USD 190 less than the high for the year of USD 1,798.90 per ounce in late February.

The decline came after Japan said its economy grew less than expected during the second quarter. Other Asian Pacific countries also are experiencing sluggish growth including China which is a huge importer of commodities such as oil and copper. That has raised concerns because the region supported the global economy when the US and Europe began to slow.

For much of the summer, gold prices have moved largely based on speculation about whether authorities in the US, Europe and China will take additional steps to promote their respective economies. Stimulus measures can raise demand for commodities, which drives up prices for industrial metals and oil for example. Gold benefits because it often is used as a hedge against inflation.

The Federal Reserve has pledged to try to bolster economic growth if hiring remains weak but didn't take immediate action after a meeting earlier this month. Now traders are awaiting Fed Chairman Ben Bernanke's remarks August 31st 2012 at an annual economic conference in Jackson Hole, Wyo. The European Central Bank and China are believed to be considering action too.

Mr George Gero VP at RBC Global Futures said that "Unless we start to see some effect of stimulus, traders are concentrating on what is now. If traders can't find something positive to point to, they tend to shy away from taking risks."

Source - Business Week.com

(www.steelguru.com)