Oct

4

Gold Loses Shine On Stronger Dollar

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Gold futures sank by 5% to the lowest level in two weeks as a stronger US currency reduced dollar-denominated prices of the precious metal.

Gold for December delivery fell by $43 or 4.8% to settle at $844.30 per ounce on the Comex division of the New York Mercantile Exchange. This rate marked the lowest closing price since September 17 this year. The fall in prices was seen in other precious metals as well. Silver for December delivery too fell by $1.65 to end at $11.12 an ounce. However platinum suffered the biggest fall as it tumbled below $1000 for the first time since December 2006 by losing as much as $50.10 or 49% to end at $979.60 an ounce for October delivery.

The fall in gold prices came after dollar got a boost by the Senate’s approval of the revised $700 billion finance rescue plan. The dollar rose both against the euro as well as the British pound and this led to a downward pressure on the prices of gold and other precious metals as the US currency became a more attractive investment option as opposed to the precious metals. Analysts in some quarters however believe that the government plan is bullish to gold prices as it could pressure the dollar.