Business | Markets
Gold falls 2% on dollar firmness and oil slide
Spot gold fell more than two per cent on Tuesday to the lowest level in a week on a stronger dollar and a sharp decline in oil prices.
- Reuters
- Published: 21:13 May 27, 2008
London: Spot gold fell more than two per cent on Tuesday to the lowest level in a week on a stronger dollar and a sharp decline in oil prices.
Spot gold dropped as low as $903.50 an ounce and was trading at $905.40/$906.40 at 1406 GMT, down from $925.20/$926.60 in New York late on Friday.
"The two key drivers have been both inflation concerns and the movements of the dollar. [But] those both have moved against the gold and we've seen prices come off amid some profit taking," said Suki Cooper, metals analyst at Barclays Capital.
A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Euro
The euro fell broadly from one-month highs after softer-than-expected German and French sentiment data cast a shadow over the health of the euro zone economy and made interest rate hikes less likely.
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The dollar built upon earlier gains after a US Commerce Department report which showed an unexpected rise in new home sales last month, the first month-on-month increase since October.
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