Futures Pros – Gold futures snapped three days of gains on Thursday, dropping to a two-day low as concerns that China would introduce further monetary tightening measures dampened demand for the precious metal. On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,362.45 a troy ounce during European morning trade, slumping 0.54%. It earlier fell to USD1,361.75 a troy ounce, the lowest price since January 18. Earlier in the day, official data showed that China’s gross domestic product rose more-than-expected in the fourth quarter. A separate report showed that inflation rose slightly less-than-expected in December, fuelling speculation the country would do more to combat inflation and cool its economy. Meanwhile, the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% during European morning trade. A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies. Elsewhere, Australia and New Zealand Banking Group said in a report earlier Thursday that it cut its 2011 price forecast for gold, saying it now expected prices to average USD1,453 an ounce, compared to a previous estimate of USD1,510. The financial service provider said that, “Safe haven demand has eased with improving European economic sentiment, while the currency market is less of a support, with a flip-flopping U.S. dollar likely to prevail over 2011.” Meanwhile, silver for March delivery tumbled 1.44% to trade at a two-day low of USD28.34 a troy ounce, while copper for March delivery dropped 0.79% to trade at USD4.324 during European morning trade. In a report, ANZ said that it expected silver prices to average USD29.70 an ounce in 2011, up from a previous estimate of USD25.00, citing “rising industrial demand and increasing investment appetite by retail Chinese and Indian investors”.

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