Gold falls sharply as dollar climbs

13:50, March 20, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange went sharply down on Friday as continued uncertainty about Greek debt crisis helped lift the dollar higher. Sliver and platinum both dropped.

The most active gold contract for April delivery declined 19.9 U.S. dollars, or 1.8 percent, to finish at 1,107.6 dollars.

The Greece's debt crisis, which kept lingering around the financial markets, helped push the euro lower by 0.7 percent to 1. 3513 on Friday. The U.S. Dollar Index, a gauge measuring the greenback's value against major currencies, soared 0.6 percent in the morning trading.

Gold moves reversely against dollar for investors generally purchase the metal, priced in dollars, to hedge against declines in the U.S. currency.

India's central bank unexpectedly raised interest rates on Friday for the first time since 2008 to combat rising prices. Interest rate hike is regarded bearish for the gold market since it usually damp demand for raw materials including precious metals. Due to the fact that India is one of the biggest buyers of gold, this discouraging news triggered a large sell-off in gold today.

May silver dropped 39 cents to 17.032 dollars per ounce. April platinum declined 22.4 dollars to 1,608.6 dollars an ounce.

Source: Xinhua
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