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 Forex Analysis
12

Trading Gold Like a Currency


Sol Palha submits:
At one point on Monday the Dollar was trading in the red and Gold, which should have shot up, was actually trading roughly 10 dollars lower. As the Day progressed both the Dollar and the Euro were trending upward together, while Gold continued to slide. The story below attempts to provide a reason for this phenomenon.

March 8 (Bloomberg) -- Gold prices in New York fell the most in a month on speculation that Greece’s fiscal crisis will be resolved, reducing demand for the metal as a haven. French President Nicolas Sarkozy said that euro-region nations are ready to help Greece. The cost to protect against corporate-bond defaults fell to the lowest rate in seven weeks on mounting optimism that Greece will rein in its budget gaps.

“If the Greek situation calms down, people may not be as interested in owning hard assets,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “Gold is losing its momentum.” Gold futures for April delivery dropped $11.20, or 1 percent, to $1,124 an ounce on the New York Mercantile Exchange’s Comex unit, the biggest decline for a most-active contract since Feb. 4. The price climbed 1.5 percent last week.


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