Gold in New York fell to the lowest price in more than five weeks as a surging dollar curbed demand for the metal as an alternative investment. The dollar rose to a 10 month high against the euro after French and German leaders said any aid package for Greece must include the International Monetary Fund, while Fitch Ratings lowered Portugal’s credit rating. The actions renewed concern that Greece’s fiscal crisis may spread. Last year, gold rallied 24 percent as the dollar fell 2.4 percent against the euro.
“You have investors talking about the euro going to parity,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “It’s very hard for the metals to hold up in that environment.” Gold futures for April delivery fell $11.50, or 1 percent, to $1,092.20 an ounce at 10:44 a.m. on the Comex. Earlier, the most active contract touched $1,087.60, the lowest price since Feb. 12.
Fitch cut Portugal’s credit rating by one step, to AA-, with a “negative outlook.” The company cited the government’s weakening finances. The difficulty European nations including Portugal and Greece have in reducing budget deficits has dragged the euro down this year. “The crisis in the Old World shows no signs of letting up,” said Jon Nadler, a Kitco Inc. analyst in Montreal. Fitch’s Portugal downgrade provides a “stark reminder that the region’s fiscal problems are clearly not confined to just Greece.” Since the euro’s debut in 1999, the 16-nation currency has moved in tandem with gold seven out 11 years.....Read the entire article.
Just click here for your FREE trend analysis of gold ETF GLD
Share
No comments:
Post a Comment