Tuesday, July 6, 2010

Gold Falls as Euro, Equities Strengthen

Gold futures dropped below the $1,200 an ounce mark early in the trading day, as the euro and equities strengthened.

Investors aren't as concerned about risk aversion today, the reason for the downward pressure on gold prices. Prices fell as low as $1,191.90 an ounce early in the trading session, as American returned from their long holiday weekend.

The euro was the primary factor so far in the day, as recently gold has traded inversely to the euro because of the sovereign debt crisis in the European Union.

This should be a temporary sell-off, being the third day in a row gold has fallen, as the market digests the implications of the sovereign debt crisis in Europe, the weak US economy and the Chinese urban property inflation challenges.

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