Daily Gold Update

Source: Marketwatch

New York— Gold and other metals futures fell on Friday, though they finished off lows, as a move by China , one of the world's biggest consumers of commodities, to slow the pace of bank lending triggered a rally in the U.S. dollar and a sell-off in commodities. Gold for April delivery, the most actively traded contract, finished down 41 cents, or 0.4%, at $1,090 an ounce at the New York Mercantile Exchange. It earlier fell to a low of $1,078.10 an ounce before recovering some ground as the dollar came off earlier highs. Gold also gained 4% for the week, after having rallied 1.7% on Thursday.

"We saw a knew-jerk reaction to the China announcement," said Brien Lundin, editor of the Gold Newsletter. "What's happening is that the market has already discounted a lot of China's tightening." Heavy selling pressure was seen in Asian trade after the People's Bank of China said it will raise the ratio of reserves banks must set aside by 0.5 of a percentage point, the second such move this year. Following the news, the U.S. dollar rallied against rival currencies, while stock futures and commodities fell. See China lifts reserve ratio. Also figuring in the mix, concerns about Greece's fiscal situation continued to weigh on gold, as the euro fell in the face of selling pressure. See full story.