Gold retreats amid reignited fear over Greek fiscal health

08:25, April 23, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange ended lower on Thursday, as euro sank to near one-year lows against the U.S. dollar. Silver dropped, but platinum extended gains.

The most active gold contract for June delivery dipped 5.9 U.S. dollars, or 0.5 percent, to finish at 1,142.9 dollars.

Eurostat, the European Union's statistical agency said on Thursday that Greece's deficit totaled 13.6 percent of GDP last year, which is worse than the government's own estimate of 12.7 percent of GDP, and could be revised even wider, which triggered the early decline of euro.

The reports that Greece might get a short-term bridge loan from its European neighbors before the EU-IMF bailout plan is initiated has brought some relief to investors and supported the euro for a short-term, before Moody's announcement to downgrade Greek debt crushed euro and sent it to touch the lowest point against the greenback in nearly one year. Meanwhile, the yield on 10-year Greek bonds surged to a record highs of 8.7 percent.

Investors who have already been rattled by the lack of transparency and details of the EU-IMF bailout plan, retreated from commodities market, and switched to dollar for the purpose of safe-haven. The rallied dollar reduced the appeal of gold as an alternative asset, but gold price has finally held its ground above 1140 dollars, due to the fact that gold is usually considered as solid store of value.

May silver dropped 6.9 cents to 18.009 dollars per ounce. July platinum was up 3.9 dollars to 1,744.2 dollars an ounce.

Source:Xinhua

(Editor:黄蓓蓓)

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