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Gold Falls with Other Precious Metals on Optimism for Greece

June 25, 2011 at 0:53 by Vladimir Vyun

Gold fell, posting the biggest two-day decline in seven weeks, and other precious metal dropped as the European Union pledged to safe Greece from the default if the nation’s government will proceed with the austerity measures. The stronger dollar reduced demand for precious metals as an alternative investment. At the same time, yesterday’s drop of fuel prices diminished appeal of gold and silver as a hedge against inflation.

Adam Klopfenstein, the senior strategist at the broker Lind-Waldock, commented:

Gold is losing the flight-to-quality bid in the near term as the leaders are working toward overcoming the Greek hurdle.

Futures for delivery of gold in August dropped as much as $19.60 (1.3 percent) to $1,500.90 per ounce by 13:45 on COMEX, the lowest price since May 19. The metal tumbled 3.4 percent in the past two days, the biggest drop since May 5. September futures for silver fell $0.366 (1 percent) to $34.65 per ounce. Futures for delivery of platinum in October slipped $17 (1 percent) to $1,680.50 per ounce on NYMEX. September contract for palladium delivery dropped $11.85 (1.6 percent) to $731.50 an ounce.

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