why gold prices down today july 12 2011 : Gold fell for the first time in seven days in London as growing concern that Europe’s debt crisis is worsening strengthened the dollar, curbing demand for the metal as an alternative investment.
The dollar rose to a four-month high versus the euro after a meeting of European Union finance ministers failed to defuse the region’s escalating debt crisis. Gold, which typically moves counter to the greenback, yesterday climbed to the highest level in more than two weeks and today reached records in euros and pounds.
“Because of the debt crisis in the euro zone, the euro is showing weakness” and that’s pressuring gold, said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. Still, “the debt crisis in Europe and the debt ceiling debate in the U.S. will play a role” in supporting bullion in the next few weeks, he said.
Immediate-delivery gold fell $9.35, or 0.6 percent, to $1,544.13 an ounce by 10:06 a.m. in London. The metal yesterday touched $1,557.05, the highest price since June 22. Gold for August delivery was 0.3 percent lower at $1,544.10 an ounce on the Comex in New York.
European finance ministers yesterday said they were considering using bond buybacks to ease Greece’s plight as bond yields surged in Italy and Spain. The announcement came after talks with bondholders on a swap of maturing Greek debt for new securities ran into opposition from the European Central Bank.
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