Gold Prices Fall; Strong Dollar
NEW YORK (
) --
were slipping Thursday as Greek debt fears hurt the euro and boosted the dollar.
Gold Prices Look to Euro
Gold for June delivery was falling $5.90 to $1,142.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,149.80 and as low as $1,132. The
U.S. dollar index
was adding 0.41% to $81.56 while the euro was slipping 0.81% against the dollar. The spot gold price today was recovering from earlier losses but was still down over $3, according to Kitco's gold index.
The IMF and European Union aren't moving fast enough for investors. Lack of details surrounding Greece's bailout package is weighing on the euro and supporting the
U.S. dollar
. Greece's budget deficit grew in 2009 lifting its debt as a portion of GDP to $115.10 percent. Ireland's ballooning budget deficit also spooked the markets and Fitch said Japan might lose its credit rating as government debt continues to rise. A stronger U.S. dollar typically means weaker gold prices as the metal becomes more expensive to buy in other currencies. The
gold price can often buck the U.S. dollar
as it did Wednesday, but today the inverse correlation is tempering gold's upside.
"Gold continues to find good dip buying interest and is proving relatively resilient to a stronger dollar," says James Moore, analyst at thebulliondesk.com in his daily metals report. Although rising global debt issues and low interest rates, especially in the U.S., are supporting gold prices, Moore anticipates some short-term consolidation. "
Gold requires a close above $1,162 to confirm a break to the upside." Investors also looked to President Obama as he spoke on Wall Street Thursday to plug financial reform. Strong regulations could curb investors' risk appetite for riskier commodities and drag on gold prices for the short term.
The
was down 5 cents to $18.02 while copper was losing 4 cents to $3.49.
Mining stocks, a more leveraged way to
, were stronger.
Barrick Gold
(ABX)
was trading up 1.59% to $40.14 while
Newmont Mining
(NEM) - Get Report
was slightly higher at $52.41. Other large cap miners
Kinross Gold
(KGC) - Get Report
and
Goldcorp
(GG)
were trading at $18 and $39.72. respectively.
Shares of
Freeport McMoRan Copper & Gold
(FCX) - Get Report
were recovering rising over 2% to $80.03. The stock came under pressure Wednesday despite the company's strong first-quarter earnings and dividend boost.
Freeport
trades in tandem with copper prices and spot copper has been coming under pressure recently as traders worry that China will cut spending, stop building and buy less copper. Freeport will seek to increase production at mines in the U.S. that it previously shut down due to weak domestic demand.
Yamana Gold
(AUY) - Get Report
was trading at $10.16 while the gold ETF,
SPDR Gold Shares
(GLD) - Get Report
was down 0.43% to $111.83. The World Gold Council release its gold investment digest today and announced that the physically backed gold ETFs it follows added 5.6 tons of gold in the first-quarter 2010 for a total of 1,768 tons.
>>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.
