
Gold Prices Plummet on Dollar Strength
NEW YORK (
) --
plummeted on Thursday on a stronger U.S. dollar and
disappointing weekly U.S. jobless claims.
Why Gold Could Keep Sinking
Gold for April delivery was slipping $45.80 to $1,066.20 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,112 and as low as $1,060.40. The
was rising 0.55% to $79.85.
European sovereign debt fears from Spain, Portugal and Greece dragged on the euro, bringing the currency down to a seven-month low against the U.S. dollar. The continued strength in the dollar is putting pressure on gold, as the metal is more expensive to buy in other currencies. Gold prices are finding support from physical buying at the $1,080 level, but their failure to push past $1,125 creates a tight trading range.
Gold prices are also coming under pressure ahead of Friday's U.S. nonfarm payroll report. Analysts were hoping for positive news, but on Thursday the
said first-time applications for unemployment benefits rose more than expected last week.
"
It doesn't bode very well. Dow futures took it pretty bad," says Jon Nadler, senior analyst at Kitco.com. "The dollar became a safe haven play once again and gold broke back under the $1,110 mark after starting the week pretty enthusiastically." Many analysts expect this risk aversion trade to continue and the dollar to remain a safe haven asset.
were sinking 85 cents to $15.46 while copper was down 9 cents to $2.88. Platinum and palladium were sinking to $1,509 and $408, respectively.
Why Gold Could Keep Sinking
Mining stocks, a more leveraged way to
, were in free-fall.
Barrick Gold
(ABX)
was falling over 5.50% to $33.97.
Newmont Mining
(NEM) - Get Report
was sinking 4.64% to $43.74 and
Kinross Gold
(KGC) - Get Report
was down 5.18% to $16.41. This comes after
Deutsche Bank
initiated both Newmont and Kinross with buy ratings.
Shares of
Freeport McMoRan Copper & Gold
(FCX) - Get Report
were falling 5.07% to $67 while
AngloGold Ashanti
(AU) - Get Report
was down 3.64% to $35.30.
Royal Gold
(RGLD) - Get Report
was lower by 3.31% to $42.20 even after the company reported better-than-expected second quarter earnings of 23 cents a share.
Shares of the popular physically backed ETF
SPDR Gold Shares
(GLD) - Get Report
were slipping 4.06% to $104.42. The ETF shed 1.59 tons on Wednesday as investors fled from riskier commodities.
>>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.











