Tags: US | Commodities | Review

Gold Prices Fall Amid Greece's Financial Woes

Tuesday, 23 Mar 2010 07:06 AM

 

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Gold prices dipped below $1,100 an ounce for the first time in nearly a month Monday as the dollar grew stronger amid persistent concerns about Greece's financial problems.

Other commodities were mixed as investors sorted through statements from European leaders about whether Greece will be able to repay its debt with outside financial support, either from European countries or the International Monetary Fund.

It's an issue that has weighed on commodities because of their relationship to the dollar. Commodities typically fall when the dollar gains since they are priced in dollars, which makes them more expensive to overseas buyers.

The dollar was stronger early Monday because investors sought out safe-haven investments due to Greece's lingering debt problems.

Later in the day, the dollar weakened after German Chancellor Angela Merkel said the European Union should bail out Greece only when it's "at the brink of bankruptcy, which it luckily is not at the moment."

HSBC analyst James Steel said the market appeared to take Merkel's comments as positive news. As the dollar fell, most commodities began to recover, he said.

MF Global senior commodities analyst Edward Meir said commodities were "just tracking the dollar," which he said was "the only currency that looks reasonably attractive" at the moment.

In April futures contracts, gold prices settled down $8.10 to $1,099.50 an ounce after falling as low as $1,092.10 an ounce earlier in the day. The last time gold fell below $1,100 an ounce was Feb. 24.

In other metals, silver for May delivery dropped 9.7 cents to $16.935 and May copper inched up 0.8 cent to $3.3805 a pound.

Grain contracts for May delivery were mixed. Wheat prices closed up 2.75 cents to $4.865 a bushel; soybeans rose 6.75 cents to $9.685 a bushel and corn fell 3.75 cents to $3.7075 a bushel.

Benchmark crude for April delivery, a contract that expires Monday, rose 57 cents to settle at $81.25 a barrel on the New York Mercantile Exchange. Most of the trading moved to the May contract, which added 63 cents to settle at $81.60.

In other Nymex trading in April contracts, heating oil rose 0.7 cent to settle at $2.0837 a gallon, and gasoline gained 0.06 cent to settle at $2.2562 a gallon. Natural gas slid 9 cents to settle at $4.079 per 1,000 cubic feet. Earlier, natural gas hit a 52-week low at $4.036.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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