Business | Markets
Gold sheds 4% as dollar rallies
Gold tumbled nearly four per cent on Tuesday as the dollar rallied to a one-and-a-half year high against the euro, denting the precious metal's appeal as an alternative investment.
- Reuters
- Published: 23:45 October 21, 2008
London: Gold tumbled nearly four per cent on Tuesday as the dollar rallied to a one-and-a-half year high against the euro, denting the precious metal's appeal as an alternative investment.
Spot gold was quoted at $767.00/$769.00 an ounce at 1304 GMT, down from $795.00 an ounce late in New York on Monday. Earlier it touched a session low of $764.20.
After several weeks of buffeting by equity markets, which have dictated interest in gold as a haven from risk, the precious metal is now returning to its usual two external influences, the dollar and crude oil, say analysts.
"The market is more focused on euro/dollar again," said Commerz-bank senior trader Michael Kempinski. "The stock market has made back some of its losses so safe-haven buying is over for the time being."
The dollar rebounded to a one-and-a-half year high against the euro, as investors were cheered by Federal Reserve Chairman Ben Bern-anke's testimony to Congress on Monday, during which he endorsed more government spending to stimulate the US economy.
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