Gold further plummets amid eurozone fears
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E-mail Xinhua, May 24, 2012
Gold futures on the COMEX division of the New York Mercantile Exchange on Wednesday extended losses to a third day, as growing concerns over Greece's possible exit from the eurozone buoyed up dollar and weighed on gold market.
The most active gold contract for June delivery sank 28.2 dollars, or 1.79 percent, to settle at 1,548.4 dollars per ounce.
Market analysts said gold returned to trading below 1,550 dollars an ounce on Wednesday, as sell-offs throughout the financial markets painted Wall Street red from the opening bell.
The outside market negativity stemmed from increased worries regarding the situation in Greece, which investors worried could potentially exit from the eurozone and throw global economy into upheaval.
In response to the perceived danger, investors flocked to the dollar Wednesday as a safe haven asset, while the euro traded at its lowest level since July 2010. However, gold was under pressure from the higher dollar, as a stronger greenback makes commodities in general more expensive for holders of other currencies.
Previously gold had actually taken some momentum from economic worries such as the situation in Greece. Recently the precious metal seems to have lost its traditional safe haven appeal, as investors have increasingly preferred the dollar.
In the last few months, gold has largely been tracking with the direction of U.S. equities and energy commodities. In addition to the losses in crude oil, the U.S. stock market also saw a huge setback Wednesday, with the Dow Jones Industrial average down more than 150 points in afternoon trading.
Silver for July delivery fell 66 cents, or 2.34 percent, to settle at 27.519 dollars per ounce. Platinum for July delivery fell 44.3 dollars, or three percent, to settle at 1,414.1 dollars per ounce.
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