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Gold Prices Tumble

Gold prices were down ahead of a long weekend as Greek debt fears hurt dollar-backed commodities.
Author:

NEW YORK (

TheStreet

) --

Gold prices

were falling Friday as Greek debt fears weighed on dollar backed commodities.

Gold for April delivery was sinking $12.10 to $1,082.60 an ounce at the Comex division of the New York Mercantile Exchange. Prices have trade as low as $1,097.70 and as low as $1,078.10.

The U.S. dollar index

was rising 0.74% to $80.58.

The euro was coming under pressure, which buoyed the dollar, after

Greece's Gross Domestic Product

contracted by 0.8% in the fourth quarter which was worse than expected. Although the European Union, IMF, European Central Bank as well as Germany and France have all pledged to support Greece, the news sparked fears that the financial situation was worse than anticipated.

Also curbing risk appetite for commodities was the news that The People's Bank of China raised the reserve requirement for banks by another 50 basis points. This restriction will further tighten lending in China, which has been hailed as stimulating the global economy

Investors are also closing out of some positions before the long holiday weekend adding to gold's downside. Many analysts expect price volatility to continue. "I would agree

with a range of $1,060 to $1,100," says David Morgan, founder of Silver-Investor.com. "I want to see it get above $1,100 and stay there three days in a row. I'm just a little suspect that this isn't going to be a long term consolidation from here." Morgan expects the $1,000 an ounce support level to hold even with further consolidation.

Silver prices

were slipping 33 cents to $15.25 while copper was falling 9 cents to $3.04.

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Mining stocks, a more leveraged way to

invest in gold

, were down along with broader equities.

Barrick Gold

(ABX)

was falling 2.48% to $36.15 while

Newmont Mining

TheStreet Recommends

(NEM) - Get Report

was slipping 2.29% to $45.69. Other large-cap miners

Kinross Gold

(KGC) - Get Report

and

Goldcorp

(GG)

were down over 2% to $17.75 and $36.56, respectively.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Report

were lower by 2.50% to $72.32, and

Southern Copper

(PCU)

was slipping 1.59% to $29.10.

The popular physically backed ETF,

SPDR Gold Shares

(GLD) - Get Report

, was down 0.97% to $106.08.

>>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.