Gold trembles due to euro debt
London,Nov. 12: Gold was lower on Friday as worries over some euro zone countries’ ability to service their debts battered stocks and commodities, but the metal recovered from lows as the dollar surrendered early gains versus the euro.
Worries that Ireland wo-uld, like Greece, need a bailout is unsettling inves-tors, while talk of a possible Chinese rate hike depressed commodities, pushing this week’s Group of 20 meeting in Seoul into the background.
Spot gold was bid at $1,387.80 an ounce at 1219 GMT against $1,409.39 late in New York on Thursday, off a session low of $1,378.00 an ounce. US gold futures for December delivery fell $16.20 an ounce to $1,387.10.
The precious metal has retreated swiftly from the record $1,424.10 an ounce it hit on Tuesday as the dollar’s rebound prompted selling of gold.
However, in the longer term the metal, which unlike other commodities is widely seen as an alternative currency and a safe store of value, could be supported by concerns over financial market volatility, analysts said.
“This is a knee-jerk risk sell-off, and gold is getting dragged down with the rest of the complex,” said RBS Global Banking & Markets analyst Mr Daniel Major.
But he said support remained for the precious metal which could override this effect. “We have seen fluctuations in the correlation between gold and the dollar this week. Gold was still pushing forwards regardless of the stronger dollar.”“In the near term... I think there is a sufficient amount of peripheral European concern that would bring out some of the safe-haven status of gold,” he added.
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