Gold for June delivery was slipping $11.70 to $1,231.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,243.70 and as low as $1,231.20. The U.S. dollar index was adding 0.33% to $85.12 while the euro sank 0.29% to $1.25 against the dollar. The spot gold price Thursday was falling over $5, according to Kitco's gold index. The spot price had been rising earlier in the day as investors opted to buy the physical metal and take profits in gold futures contracts.
Gold prices are expected to remain volatile over the short term. European debt worries are still strong despite the $1 trillion financial aid package. Although the European Union is intent on preserving the euro, investors remain dubious about its success and are buying gold as a hedge against the weakening currency. On the flip side, investors are taking profits on record high gold prices.
Gold prices have risen almost 3% this week, and for the time being, panic buying seems to have subsided. Spain and Portugal's 10-year bond yields have fallen to 3.96% and 4.68%, respectively, which means investors are more willing to lend the countries money. Spain and Portugal have committed to new austerity measures, including tax hikes and budget cuts to curtail their deficits."The euro still has problems ... as the spec funds keep testing the resolve of European finance ministers," says Jon Nadler, senior analyst at Kitco.com. "While this uncertainty in this past week sustains