Gold slips amid caution over Greece debt crisis

08:41, April 14, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange ended lower on Tuesday, as Greece debt woes still dominated and let investor worry about euro zone's medium-term outlook. Sliver and platinum both fell.

The most active gold contract for June delivery dropped 8.8 U.S. dollars, or 0.8 percent, to finish at 1,153.4 dollars.

Greece raised 1.56 billion euros on Tuesday by selling more Treasury bills than it initially planned after eurozone countries agreed on a rescue package over the weekend, according to Greek government. Analyst indicated that the high premium paid by Greece to issue the Treasury bill was costly for the debt-plagued country, which signaled investors' persistent doubts about whether or not Greece would be able to finance longer-term debt, and the feeble prospects of economic recovery across Europe.

The euro failed to sustain its earlier gains and slipped against dollar, the rallied dollar reduced gold' s appeal as an alternative asset.

The U.S. trade deficit increased more than expected in February, the U.S. Commerce Department said on Tuesday, with the rising demand for imports suggesting that the U.S. economy is rebounding. Gold dropped on mounting speculation that the Federal Reserve may soon change its super-low interest rate policy under the pressure of a larger-than-expected U.S. trade deficit.

Meanwhile, oil dropped for a fifth day on Tuesday as a forecast increase in U.S. crude inventories caused investors concern about excess supplies and weak demand growth. The decline in oil price dragged gold down with it as investors usually purchase gold as a hedge against oil-led inflation.

May silver was down 16.5 cents to 18.249 dollars per ounce. July platinum dropped 22.1 dollars to 1,717.3 dollars an ounce.



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