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Gold, Silver Plunge as Dollar Rises on Euro Fears

Wednesday, 28 Sep 2011 03:13 PM

Gold fell 3 percent Wednesday as the dollar rallied amid mounting worries about the global economy and Europe's worsening debt crisis, while this week's brutal correction also kept jittery investors at bay.

Silver plunged 6 percent as the dollar rose while commodity prices led by crude oil and grains tumbled. Wall Street also fell 1 percent as investors were cautious ahead of an audit of Greece's finances.

Bullion, which staged a one-day rally on Tuesday along with commodities and equities, has lost around 10 percent in the past five sessions after a sharp margin increase and heavy fund selling. But investors in bullion exchange-traded funds and gold options remained unconvinced that the metal's sell-off has damaged its safe-haven status.

"More liquidation from funds today were adding to month-end selling," said George Gero, vice president of RBC Capital Markets.

"It was because of disappointment over a lack of follow-through buying after Tuesday's large rally, lower industrial demand outlook and continued eurozone worries."

Spot gold was down 2.6 percent to $1,606.29 an ounce by 2:46 p.m. EDT.

U.S. gold futures for December delivery settled down $34.40 at $1,618.10 an ounce. On Wednesday, trading volume was weaker than this week's average.

Silver was down 6.1 percent to $29.88 an ounce in choppy trade.

Bullion fell as inspectors from the European Union and International Monetary Fund headed to Greece to scrutinize new austerity measures they must endorse for Athens to get the next tranche of aid.

© 2017 Thomson/Reuters. All rights reserved.

   
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Gold fell 3 percent Wednesday as the dollar rallied amid mounting worries about the global economy and Europe's worsening debt crisis, while this week's brutal correction also kept jittery investors at bay. Silver plunged 6 percent as the dollar rose while commodity prices...
Gold,metal,dollar
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2011-13-28
Wednesday, 28 Sep 2011 03:13 PM
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