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Will Gold Drop As Dollar Rebounds Against Euro?

March 1, 2010 at 21:50 by Vladimir Vyun

Gold may slid after the dollar rebounded against the euro, cutting appeal of the metal as an alternative asset. The greenback rose on concern about Greece’s debts last month. Gold have tendency to move inversely to the U.S. currency.

Yet there are some factors that can support the metal’s price. Commodities’ prices may go up as U.S. economy advanced at a 5.9 percent annual rate in the fourth quarter, the greatest pace in six years. Chile earthquake boosted the base metals prices, possibly pushing other commodities up. Africa’s biggest gold mines may halt due strikes, decreasing supply of the precious metal.

April futures for gold delivery fell $1.20 (0.1 percent) to $1,117.70 per ounce by 11:28 on the Comex division of the New York Mercantile Exchange. Immediate delivery for gold was at $1,117.30 in London.

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