Portugal Sinks Gold Prices
NEW YORK (
) --
were sinking on growing European debt fears.
Gold for April delivery was falling $12.60 to $1,091.10 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,106 and as low as $1,087.60. The
was rising 1.18% to $81.78. Gold's spot price was down over $10, according to Kitco's gold index.
Gold Finds Bargain Hunters
Portugal is now in the spotlight after Fitch downgraded its rating to "AA-" from "AA" with a negative outlook. The news
, lifted the U.S. dollar and weighed on gold prices.
The EU's summit begins Thursday and investors will be looking for a resolution to the Greek sovereign debt crisis. Although Greece has yet to ask for aid, if the EU doesn't come through with financial help then Greece would be forced to turn to the International Monetary Fund. With more European countries now at risk of some kind of default, the euro/U.S dollar correlation will be dominating commodity trading in the short term.
broke through the $1,100 area to settle at $1,103.70 an ounce. Despite short-term pressure, some indications point to strong bargain hunting at around $1,090. The physically backed ETF,
SPDR Gold Shares
(GLD) - Get Report
, added almost 5 tons Tuesday. The addition is the first inflow in almost two weeks as investors bought the precious metal as an alternative investment.
"The increase in ETF holdings yesterday is encouraging," says James Moore, analysts at thebulliondesk.com in his daily metals report. "The scale of buying around and below $1,100 ... suggests further pockets of investment diversification will continue to underpin prices."
were falling 32 cents to $16.70 while copper was down 3 cents to $3.34.
Mining stocks, a more leveraged way to
, were struggling.
Barrick Gold
(ABX)
and
Newmont Mining
(NEM) - Get Report
were down over 2%, trading at $37.54 and $50.36, respectively.
Kinross Gold
(KGC) - Get Report
was lower by 3% at $17.25 while
Goldcorp
(GG)
was slipping 3.09% to $37.69.
Shares of
Freeport McMoRan Copper & Gold
(FCX) - Get Report
were down less than 1% at $80.34. Some analysts anticipate a surge in orders from China as construction and demand for base metals continues to grow.
Yamana Gold
(AUY) - Get Report
was down 2.54% to $9.96 while
AngloGold Ashanti
(AU) - Get Report
was lower by 3.29% at $37.34.
>>Slideshow: How to Invest in Gold
>>More stories on gold investing
--
Written by Alix Steel in New York
.
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.